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Rocketing oil prices will make 2008 the year of natural gas, as it is likely to outperform both petroleum and oil, Jim Cramer told viewers of his "Mad Money" TV show Thursday.

"It's a clean, clean commodity whose time has now come," Cramer said.

And the perfect stock to play the natural gas market is Ultra Petroleum ( UPL), said Cramer. The stock is up more than 24% since he recommended it on July 9, but there's even more upside.

Ultra Petroleum is focused on production growth, Cramer said. On Friday, the company raised its production guidance for 2007 by a "staggering" 12.1%. The company's production in 2007 is expected to be 33% higher than what it was in 2006.

It is also likely to profit thanks to the federal government. The Bureau of Land Management, which regulates how much land companies like Ultra can use for drilling and how many wells they can put up, released a new draft plan that should speed up Ultra's development, said Cramer.

"All this should translate into higher earnings for UPL," said Cramer. "There's no doubt this will be great for business and UPL shareholders."

UPL also has requested exemptions from seasonal restrictions on drilling and the company is expected to get it, said Cramer.

"UPL was great before, but now they have the Bureau of Land Management on their side," said Cramer.

Natural gas got stung by Hurricane Katrina, as people though it was "unreliable," but it is the cleanest fuel and there is plenty of it, said Cramer.

Cramer also told a viewer that there is very little speculation in coal compared with oil. "It's a surprise. It's kind of a flat-line commodity because the growth of coal plants worldwide is flat-lining. No one likes the smell, stink and carbon gases," he said.

Among oil companies, Exxon Mobil ( XOM) leads the group and is the least sensitive to movements in the price of oil, Cramer said.

Occidental Petroleum ( OXY) and ConcoPhillips ( COP) could also spike, he said. ConocoPhillips is a stock that Cramer owns for his charitable trust Action Alerts PLUS.

The Winner of the George Bailey Award

Even as the financial sector continues to reel from the subprime-mortgage loan crisis, one bank is showing others how to do business the right way, Cramer said.

Hudson City Bancorp ( HCBK) serves New York, New Jersey and Connecticut and has stayed away from the speculative markets of Florida and California.

While other financial sector stocks were down an average of 20% to 25% on the S&P, Hudson led the index in July, said Ronald Hermance Jr., chairman and president of the company, who visited the "Mad Money" show.

Hudson City has been successful because of the geographic area the company operates in. "Of the 202,000 new foreclosures in November, 70% were in Florida," he said. "If you look at foreclosures in New York, New Jersey and Connecticut, they were down."

The average down payment by Hudson City's customers was exceptionally high, at 41%. "No one is going to walk away from a home if they have put down 40%," said Cramer.

Hudson City operates much more efficiently compared with its competitors, said Hermance. Other banks spend 55 cents of a dollar on overhead costs while Hudson City spends 25 cents.

The higher efficiency allows the company to give its customers better deposit rates and better rates on its mortgages, Hermance said.

"The in-born efficiency is not something you can create now," he said. "It has to have occurred 20 to 25 years ago, with getting the right kind of lease, employees, pensions, everything. You have to make that kind of investment years ahead of time."

Hudson City is willing to expand, but only in areas with the right demographics: high income and good real estate." "The Washington area is crying for something like this," said Hermance.

Cramer awarded the George Bailey award, named after the fictional character in the movie, It's a Wonderful life, to Hermance.

Redemption Time

With asset management company Legg Mason ( LM) facing an off year in its domestic equity funds, it is redemption time for investors who are asking for their money back from the company, Cramer said.

For six consecutive quarters, money has poured out of the company's domestic equity fund as a result of a lackluster performance in 2006 and 2007. "This is terrible news for them," he said.

Legg Mason isn't doing much about its subprime issues or litigation risk either, Cramer pointed out. "We thought we were investing in Tiffany ( TIF) but it turned out to be more like Home Shopping Network's cubic zirconia," said Cramer.

The funds' legendary money manager, Bill Miller, is likely to sell stocks to meet redemption, which could mean a buying opportunity for investors to pick up some knocked-down stocks. Or it could signal a rush to sell before institutional investors in some stocks crush smaller shareholders.

From Miller's portfolio, American International Group ( AIG), Countrywide ( CFC) and Capital One ( COF) are stocks investors should be selling, too, said Cramer.

But Miller's sale of Eastman Kodak ( EK), Google ( GOOG), UnitedHealth ( UNH) and Sprint Nextel ( S) could knock down these stocks and offer a buying opportunity for others, said Cramer.

"Do take advantage of the knockdown in Google or Sprint to buy some," said Cramer.

Mad Mail

In his "Mad Mail" segment, Cramer told an emailer that when investors are ahead on a speculative stock, they should take some profit but not sell all. "If you have a nice gain, take some off the table," he said.

Cramer also said he still likes Celgene ( CELG), though he has lost some faith in it. "The stock's starting to go up," he said. "Let's see where it goes."

Lightning Round

Cramer was bullish on China Mobile ( CHL), Baidu ( BIDU), PetroChina ( PTR) and Focus Media ( FMCN), Corning ( GLW), Ultra Petroleum ( UPL), Petrobas ( PBR) Siemens ( SI) and Air Products and Chemicals ( APD).

Cramer was bearish on Tidewater ( TDW), Qualcomm ( QCOM), Orion Energy ( OESX) and AXA ( AXA).

Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here.

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

At the time of publication, Cramer was long Corning and ConocoPhillips.

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.

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