Cramer's 'Mad Money' Recap: Back in the 'Hood

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Short Rigs

We care about justice as much as we care about making money, Jim Cramer told viewers of his "Mad Money" TV show Monday, referring to the "unjust" treatment of National Oilwell Varco(NOV Quote).

He said that there is an oil rig shortage, and National Oilwell Varco designs, constructs and manufactures oil rigs.

This stock is not levered to the price of oil, Cramer said. Instead, it's levered to the shortage in oil rigs. He said that they are currently so expensive to lease, that companies such as Exxon Mobil(XOM Quote) can more cheaply hire a company to build them.

That's where National Oilwell comes into play, he said. Plus, the company owns 50% of the land-based rigs market.

The stock is near $65, and Cramer believes that it should be at $77. But the stock is hated on Wall Street because "investors are ignorant about oil," he said.

They don't understand how the rig business works, and believe that everything in the oil sector should be sold if crude prices are not hitting a new high every day.

He said that the high price of oil is not priced into the stock because people don't understand that oil prices will continue to track higher, even if they're not breaking records every day.

Plus, he said that National Oilwell has "late-stage leverage" meaning that it makes its money at the end of the oil cycle.

After all the jobs have been leased and all the drilling contracted, then and only then do you need National Oilwell to provide the rigs.

Stock of the Week

Cramer said he would "step up to the plate and put [his] credibility on the line by reintroducing the "stock of the week."

This week, his pick was NuVasive(NUVA Quote), a medical device maker that focuses on spinal problems and makes gear for minimally invasive back surgery.