Jim Cramer's Best Blogs

NEW YORK ( TheStreet) -- Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
  • why the price of natural gas may have bottomed; and
  • why Allison Transmission is the IPO from this past week that you should be revved up about.

Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.


The Switch to Nat Gas Is in the Air

Posted at 3:27 p.m. EDT on Friday, March 16.

It's happening. It's in the air. And we all know it.

With oil up huge, with the threat of an embargo or a war that would halt oil from the Strait of Hormuz, this country is switching fuels. We are adopting natural gas as a cheaper way to power our trucks and ultimately our cars.

I wish this switch could somehow be done with the help and not the opposition of Washington, hastening the substitution with a credit that could be paid back for truck buyers who junk their diesel clunkers for clean nat gas engines. That way, in a couple of years we would be forcing the world price of oil lower while curing our balance-of-payments issues, making the skies cleaner and making us less dependent on our enemies in the Middle East.

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But a combination of an aversion to all fossil fuels by the Democrats (including the president) and a persistent lobbying effort of the chemical companies, which want nat gas low to get a cheap feedstock, has kept this change from coming about even faster.

Still, I think it's become obvious to all but Washington that change is gonna come, and we have to start thinking that natural gas may have bottomed at last -- yes, after a tremendous plunge in price. If that's the case, we have to examine who is most and who is least levered. If you want to know the pure plays, you have to buy Southwestern Energy ( SWN) and Ultra Petroleum ( UPL). They have always stayed true to the fuel. Then there are the switchers, outfits frantically trying to become much less dependent on nat gas and more on oil -- they can also be huge beneficiaries if the bottom call is right. I'm talking here about Chesapeake ( CHK), Devon ( DVN), EOG Resources ( EOG) and Anadarko ( APC). The action in all of these names tells me that I am not alone in this belief.

Lastly, the levered speculative play is Heckmann ( HEK), a scorned service company that missed its last quarter but to me remains a colossally fabulous spec on the turn.

As always, I have to remind you that the U.S. Natural Gas Fund ( UNG) is not the way to play this turn, because it simply isn't a true tracker of the fuel due to issues long chronicled here in my columns as well as by Dan Dicker in other RealMoney pieces.

I don't expect immediate tightness in the fuel. There's too much of it, and that's not going to change anytime soon. But I think that a statement about how we have seen the lows makes a ton of sense -- and as my colleague Matt Horween has indicated here many times, this common-sense fuel is just too attractive to continue to plummet in price with oil trading out of control to the upside.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.


The Switch to Nat Gas Is in the Air

Posted at 1:18 p.m. EDT on Thursday, March 15.

Slow and steady will win the aftermarket race. I am talking about two deals that came today, two very different IPOs. One made you a lot of money if you got in, and one could make you a lot of money if you didn't.

This morning Demandware ( DWRE), cloud play on Internet commerce, and Allison Transmission Holding ( ALSN) came public. I had told you to do your best to get into Demandware because the space is hot and this could be the next Salesforce.com ( CRM) of Internet commerce. The price talk was $12 to $14 and I said that it seemed reasonable, even though it is losing money, to pay up to $16 because then it would be at 5 to 7 times sales, which is as the high end of the range of similar IPOs in the space.

Today it was priced at $16 and opened at $25, more than 10 times sales, an absurd level, immediately the most expensive stock in the sector.

Allison Transmission, a company that is cash-flow positive on the other hand, came public at $23, opened around there and then fell a dime below it. Here's a company, spun out of General Motors ( GM) and purchased by a private equity firm that has a tremendous franchise in automatic truck transmissions, a growing area in a growing cohort. Don't forget we like Cummins ( CMI), a truck titan that hit a 52-week high today and we know that the truck cycle is very robust. When I interviewed Lawrence Dewey, the truck industry veteran CEO for Allison, he said that despite the tremendous revival in the truck business, the turn's only in the fifth inning, not of a preseason game but of the real deal.

We know also from our work on the natural gas trucking industry and the fill-up station businesses of Westport Innovations ( WPRT) and Clean Energy Fuels ( CLNE) that tons of trucks are being bought to comply with new emissions rules. We also know that Allison offers an automatic truck transmission that is taking share away from Wabco ( WBC), which in itself is a very good company.

Now, Demandware is one of those companies that I hope you were lucky to get in at $16, but I think has now reached a level where I cannot possibly tell you to hold on to it. I think that the register must be rung and the stock cannot and should not be bought in the aftermarket.

Allison, on the other hand, represents genuine value and the fact that it didn't go to a premium allows me to tell you that this is a terrific play right here on the resurgent truck business.

We're invoking that stock sage Aesop here, the tortoise that is Allison now has it all over the fast-starting hare. Sure, if you include the first-day performance, the rabbit wins. But going forward, I'm taking the turtle. I like the long-term stock prospects of Allison much more at this point than Demandware.