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Editor's note: This column is an update of a portion of the "Mad Money" episode that aired June 13. Click here to read the full Mad Money Recap for that episode.

The bad tape just seems endless. We're losing money out there every day -- sometimes in dribs and drabs, sometimes in an avalanche of lost cash. But I'm not here to be your grief counselor, I'm here to try to make you rich.

Look, when you have a situation where the market's been getting crushed week after week, day after day, sooner or later you need to start bargain-hunting. You know where the big bargain is right now, the one that can really make you money?

It's natural gas. I know these natural gas stocks have been awful; they've been playing out back with


(VG) - Get Vonage Holdings Corp. Report

the dog. But man, they have become too cheap. They're trading like value stocks, and on "Mad Money," we like value where we can find it.

Right now natural gas is trading at the lowest ratio to oil that I can remember, and I've been in this game for a long time. Do you know how significant that is? Nat gas right now is trading at a 12-1 ratio with oil. Normally it's more like anywhere from 6-1 to 8-1. So what we're seeing now is natural gas about half price compared with oil. Is that a bargain?

Well, it's down there for a reason: We had such a warm winter that we didn't burn off the natural gas we thought we would. Now all the storage space is used up and that's really keeping prices down. But you know what? If we have one bad storm or cold winter, natural gas goes from $6 to $10 in a heartbeat.

The other reason these natural gas stocks are cheap is a function of the way hedge funds and mutual funds operate. See, it's the end of the quarter, and none of the guys who run these funds want to own natural gas. They have to show the people whose money they're running what their portfolios look like, and they don't want any of these shoddy natural gas stocks in there making them look like morons. So they're just dumping this stuff on the market, even though there's real value here.

With natural gas too cheap relative to oil and being dumped unceremoniously from the hedge funds and the mutual funds because of that stupid game they play, you've gotta be a buyer of natural gas. And since we're value-hunting, that means you want the cheapest natural gas; you want the company that's most levered to any price increases.

You want


(CRZO) - Get Carrizo Oil & Gas, Inc. Report

homegamers. These guys are by far the largest player in Barnett Shale, the best natural gas play left in America. Everybody wants a piece of this. Barnett shale, by the way, is just buried right under Fort Worth, and they have to drill horizontally under office buildings and apartments and airports -- it's ridiculous. We should just bulldoze the town so we can drill straight down. Carrizo's got exposure to Fayetteville shale -- another great play, too, and they're all over the place in Texas. If you buy Carizzo, it's like you're buying J.R. Ewing from


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. What? The younger generation doesn't know Dallas? Of course you do -- you people were watching this with your parents when you were little, remember the


theme song?

Who shot J.R. aside, Carizzo also has exposure to the Gulf, which is where the huge potential upside comes in. See, you probably didn't notice, but on Friday morning there was a sudden and enormous surge in all the oil and gas drilling stocks. It was like they blew a wellhead and busted right up.

On Friday we had Tropical Storm Alberto swing through, and all the short-sellers were covering just in case Alberto veered west. Now, let's just explain that for a second.

The shorts are the people betting against oil and gas. They borrow the stocks, sell them and then buy them back and return them at a lower price. That's how you bet against a stock. But in order for a short to take profits, he has to


the stock, and that's what caused the spike. All the shorts covered for fear of Alberto, but Alberto went the wrong way and all the stocks came back down. If we get another storm like Alberto -- how can we not? -- and it goes in the right direction, Carizzo's going to have a huge catalyst because natural gas prices will be spiking, and that, my friends, means you make money.

Natural gas isn't going much lower; so this stock has very little downside. On the other hand, the potential upside is enormous if natural gas comes back up, just to historical averages -- forget highs -- like I think it will. And in a world where

Houston Exploration

( THX) just got a bid from a shareholder who thought the market was treating the stock too cheaply, I think that Carizzo could have a breakup value of $40 if it gets bought or taken apart.

Right now, as we speak, Carizzo is having its people tour the country to keep its shareholders happy -- if they want to sell it. That's how it'll happen.

Bottom line: Natural gas has gotten way too cheap, and Carizzo is, I think, the smartest way to play it.

At the time of publication, Cramer had no positions in the stocks mentioned.

Jim Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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