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Cramer's 'Mad Money' Recap: Risk vs. Reward

Evans said that Magnum will use the $401 million in proceeds from the sale to pay down debt and take questions about the company's liquidity off the table once and for all. He said that Magnum will still be producing 20,000 barrels of oil a day, even without the Eagle Ford, and the company will make a 60% to 70% return on their remaining assets.

Evans explained the economics in both the Utica and Marcellus will be better for Magnum, especially given that natural gas prices have risen from $2 to $4. He said his company is hedged for 2013, but remains open for 2014 and 2015 given that gas and oil prices continue to creep ever higher.

Cramer admitted that he was clearly wrong to recommend Magnum Hunter a year ago, but with the changes the company's made and its outlook greatly improved, he said that now is the time for investors to average down.

Game-Changing Gene Therapies

Continuing with his focus on smaller, speculative biotech opportunities, Cramer looked at Isis Pharmaceuticals (ISIS), Alnylam Pharmaceuticals (ALNY) and Sangamo BioSciences (SGMO), three companies hoping to change the game when it comes to gene therapies.

Cramer said shares of Isis are already up 78% since he recommended it in October, but this orphan drug maker still holds a lot of promise. He said the company has over 20 drugs in development including treatments for breast and prostate cancers. He said investors should use any weakness in the stock to buy more.

Then there's Alnylam, a company working on similar gene therapies. It currently has five drugs under development. Cramer said Alnylam only has a $1.3 billion market cap, which means any Food and Drug Administration approvals would "move the needle" significantly for the company. Alnylam also has a suite of large biotech partners helping it along, which makes success all the more likely.

Finally, there's Sangamo, a company with a $500 million market cap and a stock that's "highly, highly speculative," said Cramer. Sangamo is a high-risk, high-reward stock, he said, but the company's HIV treatment, currently in Phase II testing, could offer the first functional cure for the disease.

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