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"There are companies that can benefit from higher oil prices," Jim Cramer told viewers of his "Mad Money" TV show Wednesday. "But they're not who you might think."
Cramer posed the question: "Why is it that while oil has risen from $100 to $130 a barrel, the large integrated oil companies have barely moved?"
While oil prices have jumped 30%, Cramer noted that shares of
rose only 1%.
was up only 2.4% and
was up only 1.6%.
Cramer says big oil just cannot take advantage of the higher oil prices because they either just can't drill for enough oil, or they expected oil prices to retreat and hedged their bets. Some signed contracts with foreign governments that backfired.
That hasn't been the case, he emphasized, with oil stocks that have natural gas exposure.
Once again proclaiming 2008 the year of natural gas, he provided a laundry list of stocks which are now up an average of 33.8%.
. Cramer owns all these stocks for his charitable trust,
Action Alerts PLUS.
He also recommended
Cramer said all of these companies share a common theme: They are constantly on the move, acquiring assets and drilling for more and more oil and natural gas.
Cramer noted that typically, the ratio between oil and gas is 6:1. Using that historic ratio, natural gas could go as high as $23, but Cramer is sticking to his earlier estimates of just $16 for the commodity.
Cramer: The Two Food Stocks to Own
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Switching gears, Cramer also recommended what he called the "twice blessed" fertilizer stocks, which are benefiting from both a worldwide food shortage and increased demand for ethanol production.
as continued strong buys.
He told viewers these are names he has recommended repeatly as the ones to stick with. Since he first recommended these names on Oct. 31, 2005, Mosaic is up 1120%, Agrium up 419%, and Potash up 773%.
Where the Analysts Are Wrong
"How does a great old brand reinvent itself to trounce its competition?" Cramer asked his viewers.
He welcomed Paul Varga, president and CEO of
, to the show to talk about what happened.
According to Cramer, Brown-Forman has dominated the liquor market, with its stock up 7% this year, compared to
, down 12%,
, down 15%, and
, down 21%.
Cramer, a long-time supporter of Brown-Forman, first recommended the stock on Aug. 30, 2005 at $57.41 a share. Since then, shares of Forman are up 33%, and up 5.3% since a more recent recommendation on May 13 of this year.
But with the stock now just below the most recent blessing on June 6, Cramer went to Varga for answers.
Varga explained that while the market has seen some abandonment of premium brands for lesser expensive alternatives, he feels the analysts are overestimating its impact and underestimating the growth for Brown-Forman overseas.
He said Brown-Forman has been focused on extensive branding for its products, which has helped to separatetheir brands from all others. "People ask for Jack Daniels by name now," he said.
Varga also said Brown-Forman continues to look for and acquire strong brands when the opportunities arise. Cramer reiterated his support for Forman, stating that the international side of their business just hasn't been taken fully into account and he sees multiple years of growth for the company.
Am I Diversified?
Cramer evaluated the portfolios of callers in this segment. The first caller's portfolio included
Cramer identified two of a kind with Potash and Agrium and recommended selling Agrium and adding a healthcare of defense stock to the portfolio.
The second caller's top holdings included
Cramer called this portfolio "completely and totally diversified."
The third caller had
as their top five stocks.
Cramer liked all of the companies, calling this portfolio "the best of them all."
In this segment, Cramer reiterated his buy on
as a great electric motor and "new tech" company.
Cramer told a second viewer that
recent decision to add 10% ethanol to the gasoline it sells should not impact the company's earnings.
Cramer was bullish on
Denbury Resources Inc
Cramer was bullish on
Air Products and Chemicals
Black & Decker
Procter & Gamble
He was bearish on
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At the time of publication, Cramer was long Southwestern Energy, McDonald's, Foster Wheeler and XTO Energy.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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