This column was originally published on RealMoney on Jan. 26 at 11:23 a.m. EST. It's being republished as a bonus for TheStreet.com readers.
They've softened the beach for the oil drillers ahead of the
quarter. That's excellent news. I regard the downgrades today of the drillers,
by JPMorgan and the whole shebang by Raymond James, as gifts. You want these stocks down so they can be bought, not chased on the fly.
But why be in them? Why be in them if there is near-term risk to the price of oil, as Raymond James says? Why be in them if they have already exceeded price targets and are no longer cheap?
I say you want to be in them because the price increases are still coming, the capacity is still not being added and the drilling is becoming vicious worldwide.
Now, let's layer on the fact that many of these stocks have pulled back huge and don't have a lot of supporters on the Street, or at least, not at many as they did a few weeks ago.
Here's what you need to know. These are unique stocks, unique in that they are in pure, oxygenated, bull-market mode, with excellent margin expansion and accelerating revenue growth. This group,
unlike every other group I have seen in this reporting period
, is consistently crushing numbers and guiding up. But they haven't guided up
much that if oil just stays in the $50s, they can't go higher.
We all "think" that oil should come down. We all "think" that natural gas is too high. It's down 50 cents as I write and is below $8! Really scary!
So far, though, the "thinking" has been wrong at every step and there is strong demand for both oil and gas at these levels. Plus the geopolitical cause is so in your favor as to be frightening. (I heard some guy put odds on nuclear war this morning on
-- and he made sense.)
I say, you accept the fact of the group's volatility and put some on here, into the weakness, in a classic 5%-8% pullback that always happens to groups that are in bull-market mode.
It's a gift.
Find out what I've said about your favorite pick in this sector on "Mad Money" using "Cramer's Mad Money Performance," a service from TheStreet.com that follows the picks and stock mentions from my television show. All the drillers and oils that my callers and I have talked about are here, plus lots of historical data on past picks.
Click here to use it.
At the time of publication, Cramer was long Halliburton.
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