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Cramer's 'Mad Money' Recap: Reaping the Benefits of High Oil Prices

Natural gas companies have benefitted the most from the hike in oil prices, Cramers says.

Click here for an archive of Cramer's "Mad Money" recaps.

"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

Exxon Mobil

(XOM) - Get Exxon Mobil Corporation Report

rose only 1%.

BP

(BP) - Get BP p.l.c. Sponsored ADR Report

was up only 2.4% and

Marathon Oil

(MRO) - Get Marathon Oil Corporation (MRO) Report

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%.

They include

XTO Energy

(XTO)

,

Southwestern Energy

(SWN) - Get Southwestern Energy Company Report

and

El Paso

(EP)

. Cramer owns all these stocks for his charitable trust,

Action Alerts PLUS.

He also recommended

Ultra Petroleum

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,

Apache

(APA) - Get Apache Corporation Report

,

Anadarko

(APC) - Get Anadarko Petroleum Corporation Report

and

Chesapeake Energy

(CHK) - Get Chesapeake Energy Corporation Report

.

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.

He noted

Mosaic

(MOS) - Get Mosaic Company (MOS) Report

,

Agrium

(AGU)

and

Potash

(POT)

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.

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He welcomed Paul Varga, president and CEO of

Brown-Forman

(BFB)

, 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

Diageo

(DEO) - Get Diageo plc Sponsored ADR Report

, down 12%,

Constellation

(STZ) - Get Constellation Brands, Inc. Class A Report

, down 15%, and

Fortune Brands

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, 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

Agrium

(AGU)

,

Potash

(POT)

,

Apple

(AAPL) - Get Apple Inc. (AAPL) Report

,

Caterpillar

(CAT) - Get Caterpillar Inc. Report

and

Sohu.com

(SOHU) - Get Sohu.com Limited Sponsored ADR Report

.

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

JC Penney

(JCP) - Get J. C. Penney Company, Inc. Report

TheStreet Recommends

,

Dow Chemical

(DOW) - Get Dow, Inc. Report

,

Disney

(DIS) - Get Walt Disney Company Report

,

EnerSys

(ENS) - Get EnerSys Report

and

Foster Wheeler

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.

Cramer called this portfolio "completely and totally diversified."

The third caller had

McDonald's

(MCD) - Get McDonald's Corporation (MCD) Report

,

Transocean

(RIG) - Get Transocean Ltd. Report

,

Waste Management

(WMI)

,

CVS Caremark

(CVS) - Get CVS Health Corporation Report

and

Caterpillar

(CAT) - Get Caterpillar Inc. Report

as their top five stocks.

Cramer liked all of the companies, calling this portfolio "the best of them all."

Mad Mail

In this segment, Cramer reiterated his buy on

Baldor Electric

(BEZ)

as a great electric motor and "new tech" company.

Cramer told a second viewer that

Costco's

(COST) - Get Costco Wholesale Corporation Report

recent decision to add 10% ethanol to the gasoline it sells should not impact the company's earnings.

Sudden Death

Cramer was bullish on

Pepsico

(PEP) - Get PepsiCo, Inc. Report

,

Denbury Resources Inc

(DNR) - Get Denbury Resources Inc. Report

,

Wells Fargo

(WFC) - Get Wells Fargo & Company Report

,

US Bancorp

(USB) - Get U.S. Bancorp Report

and

Motorola

(MOT)

.

Image placeholder title

Lightning Round

Cramer was bullish on

Praxair

(PX)

,

Airgas

(ARG)

,

Air Products and Chemicals

(APD) - Get Air Products and Chemicals, Inc. Report

,

Black & Decker

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,

A-Power Energy

(APWR)

,

Procter & Gamble

(PG) - Get Procter & Gamble Company Report

and

YRC Worldwide

(YRCW) - Get YRC Worldwide Inc. Report

.

He was bearish on

Kimberly-Clark

(KMB) - Get Kimberly-Clark Corporation (KMB) Report

,

Garmin

(GRMN) - Get Garmin Ltd. (GRMN) Report

and

Sterlite Industries

(SLT) - Get Salt TruBeta High Exposure ETF Report

.

Want more Cramer? Check out Jim's rules and commandments for investing by

clicking here

.

For more of Cramer's insights during the Lightning Round, click here

.

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."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.