Low-Cost Nat Gas Producer
In the "Executive Decision" segment, Cramer spoke with Steven Mueller, president and CEO of Southwestern Energy (SWN), another Action Alerts PLUS name and a stock which Cramer recently recommended after the company was one of the worst performing stocks in the S&P 500 last year.
Mueller said that Southwestern is one of the lowest cost producers of natural gas in the U.S., which means that his company is able to make a lot of money even with natural gas prices at record lows. He said Southwestern is delivering record production, record cash flow and building record reserves, adding the company is just waiting for Wall Street to recognize them.
Ultimately, Mueller said the low price of natural gas is a good thing for the U.S., as it spurs more interest in the fuel. He said that the Obama administration is talking more and more about natural gas, and individual states are also considering gas as a viable long term alternative to coal and nuclear facilities.Mueller said he's excited about Southwestern's game plan and prospect for the future. He said the company has a strong balance sheet to execute its plans, but he's also not opposed to considering a takeover or merger with another company if it's in the best interest of Southwestern shareholders. Cramer said he continues to be a believer in Southwestern and thinks the time to pull the trigger, is now.
Fertilizers Breaking to UpsideIn the "Off The Charts" segment, Cramer went head to head with colleague John Roque over the charts of the fertilizer stocks, a group that's poised to ramp notably higher. According to Roque, a chart comparing the relative performance of the WJB Capital Fertilizer Index versus the S&P 500 shows that the fertilizer group has built a lengthy 19-month base, and is now ready to break out to the upside. He noted that money managers will begin piling into this sector now that its beginning to outperform the broader average. Cramer said he's in total agreement with Roque, noted that there will be a worldwide food shortage for the foreseeable future as a rising global middle class continues its appetite for more expensive food. He said foods like meat and chicken will continue to require more grains, and that means more fertilizers and more farm equipment will be needed. Cramer's theory was proven correct by the most recent crop reports, which were very bullish and showed a big drop in grain inventory levels. The reports also noted that despite higher prices, demand for grain remains strong. Cramer said this means multi-year earnings growth for companies like John Deere (DE), an Action Alerts PLUS stock, along with Potash (POT), Mosaic (MOS) and Agrium (AGU).
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