After this segment, you
can see Jim's Lightning
Round picks
here...
JJC: I
listened to the
belly-achers all day...
It's starting to really
get on my nerves...
Instead of bemoaning the
fact that we're now paying
$4 a gallon at the pump...
we'll probably be paying
$5 in the not-too-distant
future... Instead of
freaking out, because a
barrel of crude costs
$134... Instead of taking
what is, in my opinion, is
the insane position that
speculators are to blame
for higher prices... or
that the dollar is fueling
the rise... Oh, like it's
not going up in the other
countries?... Hello...
Blame the speculators,
right... What do you think
they're doing? Do you
think they're hoarding
barrels of crude in the
basement?... In the
attic?... Every place that
you could possibly store
the stuff - even if you
are speculating - is
taken. If every storage
locker in this country
were filled from top to
bottom with barrels of
oil, because it seems to
me they'd have to be, if
the speculators were
really behind the
long-term increase in
price... They've got some
tankers that are filled...
They're not the reason
either... As a matter of
fact, that idea is even
more nuts than I am...
I believe oil prices are
high for three reasons...
count 'em... three...
One... the old oil fields
are running out.
Do you think the Saudis
wouldn't want to take
advantage of this? They're
not refusing to increase
production... because
they've got a bad
attitude... Believe me,
they'd love to pump more
oil, at these prices...
They don't want it as an
umbrella for alternative
energy... but they can't!
Last year, they needed
double the rigs to produce
the same amount of crude
as they did the year
before...
Two... second reason...
New oil is harder to find
and harder to get out of
the ground than it has
ever been.
It's either deep under the
sea, or inaccessible,
because of the weather or
distance... The easy finds
have all been made...
And three... Even as we
can't increase the supply
of oil anytime soon,
demand is increasing
astronomically, thanks to
huge economic development
in countries like China
and India... and also the
Gulf states...
Here are some stats...
We use 25 barrels of oil
per person per year in
this country. China and
India are using 2 barrels
(per person)... What do
you think the odds are of
that number doubling? I
think they're pretty
great.
On this show, we're not
complaining about the high
price of oil and gas...
Like every other thing we
do in Mad Money, we are
trying to make money off
it... make money off the
trend...
And that's why, this week,
my friends, buddies and
pals... is Wildcat Week,
here on Cramer's Mad
Money...
. . . .
.
What is a wildcatter?...
It's a company that drills
for oil and gas in new
areas that haven't been
exploited yet... I regard
the wildcatters, which are
the hottest of this stock
market, as the Daniel
Plainviews of the oil and
gas business... That's
right... this is "There
Will Be Blood Week" (i.e.,
movie reference from Best
Picture nomination in 2007) all over
again... because these
wildcatters are the
companies that could
actually increase supply
by finding new oil...
When oil was much lower,
none of these stocks would
have worked... I would
never have come to you
with them... They were too
expensive to drill on
their prospects... not
worth the effort... but
the umbrella of higher
crude prices has made
wildcatting a potentially
darn good business. It's
been great for the
domestic drillers, which
we have favored here...
You know which ones...
52-week high denizens...
Nabors (NBR) and
Halliburton (HAL).
We like wildcatters for
oil and natural gas... and
we like the ones that are
after natural gas,
especially... Why? Because
2008 is Cramer's year of
natural gas... It's at $12
and change now... Anyone
who's listened to this
show one night a week
knows that this has been
my favorite group for the
year. I've said natural
gas is going to $16. But
that was when oil was down
at $100, so who knows how
much higher natural gas -
which is the cleaner,
cheaper fuel - will go,
before it catches up...
And what would happen if
one of the (U.S.
presidential) candidates
actually got behind
natural gas?... And
neither is...
This week's special...
I've got five
wildcatters... five of
them... five stocks in the
mold of
Continental Resources Inc.
(CLR)... a
wildcatter where, if you
remember, was part of a
series on stocks where I
whiffed... where I waited
too long for the perfect
pitch, and got called out
on strikes... I kept
waiting for CLR to come in
when the stock was in the
$20s and it never did...
Then I finally recommended
it on May 9th, with the
stock at $53.18. Now the
stock's at $74. I finally
said, you know what...
discipline said get on...
it's going higher... don't
miss the move... and it
gave us a humongous 39%
gain, proving it wasn't
too late to get behind a
wildcatter...
There will be blood?...
Let's try, there will be
moolah...
. . . .
.
The first wildcatter I'm
giving you this week is
Petrohawk Energy Corp. (HK)...
This independent driller,
often asked about during
the Lightning Round , is
one of the lowest-cost
producers in the group,
behind only
Southwestern Energy
(SWN*) and
Ultra Petroleum (UPL)...
90% natural gas... 1.1
trillion cubic feet of
proven reserves...
It's drilling in west
Texas, plus a small
project in Oklahoma, along
with a similar one in east
central Texas... But the
biggest drivers for HK are
its assets in Fayetteville
Shale in Arkansas... and
Haynesville Shale in
Louisiana. Get used to
hearing about these two
properties... they're
gigantic.
HK is the second-largest
driller in the Haynesville
Shale, after Cramer-fave
Chesapeake (CHK),
whose CEO, Aubrey
McClennan, I believe may
be the best natural gas
man in America... in
addition to being a shrewd
and endless buyer of his
own stock... a recent one
(buy) just last week...
There have been finds in
the Haynesville Shale...
one from Penn Virginia
Resource Partners (PVR),
which immediately went up
30% after the
announcement... and
another from Goodrich
Petroleum (GDP),
which gained 44% in the
same period...
Since HK is the number two
driller in the Haynesville
Shale, it's expected to
have 5-6 rigs operating 10
wells by the end of the
year. Both of these finds
are good for the stock, if
only because they draw
attention to other
drillers in the area...
but also because they
prove it's been an area
worth drilling in...
The company expects it can
be potentially sitting
on... these are big
numbers, okay... 6.1
trillion cubic feet of
natural gas in
Haynesville. This is on
top of another prospect,
at Fayetteville Shale,
where they expect HK to
produce as much as 315
million cubic feet of
natural gas this year...
way up from last year...
with what looks like
plenty more coming, given
that HK has as much as 3.2
trillion cubic feet of
reserve potentially...
. . . .
.
You see what I'm getting
at?...
You know, the old online
and the big integrated oil
companies... they don't
have finds like this...
They're not upping their
amount of production,
because they can't...
That's for wildcatters to
do...
In this environment, I
think HK may be a $48
stock, masquerading as a
$35 stock.
Everyday this week, I am
going to give you another
wildcatter just like it.
Now please understand... I
am not backing away from
the ones I've been behind
all along, with this new
series... Repeat after
me... I still like
Devon (DVN),
Southwestern
(SWN*),
which I own for
my charitable trust...
XTO (XTO*),
another charitable trust
name...
Apache (APA),
Anadarko
(APC),
Chesapeake (CHK)
and
Ultra Petroleum (UPL)...
I just want some new
names, that people don't
know about, to get you
involved in this business.
Here's the bottom line...
. . . .
.
The Bottom Line!:
Under the umbrella of $134
or $130 or $125 or $120
(cost per barrel)...oil...
it's time for the
wildcatters to come out
and play, which is why I
think you should buy
Petrohawk Energy Corp. (HK)...
. . . .
.
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After this segment, you
can see Jim's Lightning
Round picks
here...
Jim's comments BEFORE
the interview:
Today, you got an
opportunity to buy one of
my favorite "new tech"
stocks that's also a play
on wind power, our
favorite source of
renewable energy on Mad
Money... It's 2009's
fuel... because it's the
cleanest and cheapest, at
4 cents a kilowatt...
And, aside from some
geographic limitations, I
think it's the best way to
generate clean energy.
It also has a business
that keeps growing and
growing - and able to
raise prices, to be able
to make money - because
oil's up so much...
Now, I recommended this
stock back on May 12th, at
$24.74. The stock
then surged up to $28.50
on some positive
developments. Now
it's right back... back to
$24.82, the same price I
recommended it...
OC a pastiche of a
company... but not an
enigma... to those who
understand that companies
can change their
stripes...
Most people think of this
stock as a housing play.
They think it's the Pink
Panther for the insulation
business... It
also makes shingles and
asphalt... not attractive
right now, because those
use a lot of energy...
although the insulation
business obviously has a
green side...
It helps to save energy.
Insulation saves 48% of
the energy in homes, and
30% in commercial
buildings... But
that doesn't matter to
those on Wall Street, who
insist on viewing the OC
as simply a housing play,
and they don't like it...
Our opportunity...
I think they couldn't be
more wrong, because
there's another side to
Owens-Corning, both larger
- a faster-growing side -
and that's the composite
materials business...
where OC takes glass
fibers and combines them
with other materials to
create composites that are
strong, durable, light and
flexible. These are
the composites and
components used by the
wind industry, where you
really need materials of
incredible strength and
flexibility and, just so
we know... these things
run hot... they run hot...
people don't understand
that... so you need a
strong composite.
That's why I recommended
the stock at $24 and
change... Since then, OC
has expanded its composite
business in Russia and
China... and the weaker
looking
construction-related
businesses are looking to
stay more stable, with
OC's re-insulation
business expected to grow
at a 10% clip...
Again, profitable...
The entire insulation
division is now expected
to remain profitable for
the whole year, in spite
of the black hole of money
that is the homebuilding
industry, thanks to
capacity management...
Remember, by the way, the ^HGX
testing its low...
the housing industry...
lots of the companies
still in trouble... so we
also have trepidation
about the stock, after the
run...
We'll find out more in a
second...
The company expects its
roofing and asphalt
business to improve for
the rest of the year,
because of higher pricing
and seasonality...
Now, you had a chance to
buy OC at $24.74.
Now, even with the
positive new developments,
you can get it even
cheaper.
I smell opportunity...
but I want to get a
clearer picture of OC, to
help convince the
skeptics, of which there
are many, who are worried
about its exposure to
housing and energy
costs... to make its
product...
And that's why we're
giving a Mad Money,
triple-booyah welcome to
Mike Thaman... He's the
chairman and CEO of
Owens Corning (OC)...
Sir, how are you...
. . . .
.
Jim's comments AFTER
the interview:
I am so glad I got behind
your company, and I think
you've got another great
opportunity to buy the
stock at $24.
. . . .
.
■
Stock Snapshots - Includes
all stocks mentioned above
■
Jim
Cramer's
rating on
this stock
STOCK
SYMBOL
Closing
price
that
day
Opening
price
next
day
Full Company
Name/Comments
(see comments above for
each)
Go to the LIGHTNING ROUND from
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Finance from
tonight's show stocks
here >>
Symbol keys:
A Charitable Trust stock.
- An asterisk next to a
stock symbol indicates that
Jim mentioned it is a stock
that he manages within
his
charitable trust portfolio.
You can see the complete
portfolio
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here >>
Thumbs up - indicates
he would buy the stock or,
at the very least, not sell
the stock. We do our
best to interpret Jim's
opinion on stocks, as we
think it is indicated by his
comments during the show.
Please read his comments to
decide for yourself.
Thumbs down -
indicates he has said not to
buy or to sell the stock,
based on his comments
We do our best to interpret
Jim's opinion on stocks, as
we think it is indicated by
his comments during the
show. Please read his
comments to decide for
yourself.
Back up the truck -
indicated by Jim, when he
says the stock is so good,
that he would do a
'mon-back' on the stock...
In other words, this is the
sound someone would say to a
truck driver, "Come on
back... " as he is "backing
up the truck" to load up on
his cargo. Translation
for buying stocks:
This recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point.
Stumped. - Of the
2,000+ stocks that Jim
Cramer has in his head, for
which he has an informed
opinion, he sometimes comes
across a caller with a stock
he does not know well enough
to opine on... He then
indicates he is stumped and
will have to come back to
it, after he does some
homework of his own on
the stock. This
usually occurs during the
Lightning Round, when Jim
does not know in advance who
is calling, or what their
stock question is about.
Definitions of key phrases
used by Jim, known as
"Cramerisms":
Definition: 'Pull the
trigger' is Jim's phrase for making
the decision at that point to trade -
either to 'buy' or
to 'sell' (although he
usually uses the phrase for
buying), as if to say you
should feel comfortable
enough to make the final
decision without looking
back...
Definition: 'Ring
the Register' is Jim's phrase for
selling a stock, and making
it a final sale, that you
should not look back on.
Put it behind you.
Definition:'Let It Come In' indicates how you
may wait for it to pull back, or have the
stock price come down briefly, as your
chance (after letting it come in) to buy
the rest of your position (i.e., total
number of shares you own in that stock).
Definition:'backing it up'
or 'doing a 'mon-back' is Jim's
phrase for the metaphor of backing up a
truck to load up on a stock by buying
it. 'Mon-back is short for the
imaginary worker saying, 'Come on
back...' as the truck is backing up to
receive its load... Notice that we use
the little truck icon to indicate where
Jim has mentioned this.
Translation for buying
stocks: This
recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point.
See more
"Cramerisms" & other
financial phrases
here >>
Helpful Websites:
See the stocks currently
known to be in Jim Cramer's
Charitable Trust at:
Stock Homework 101:
This is an excellent
upcoming site that provides
resources and links to help
you do that homework that
Jim Cramer recommends after
hearing his suggestions...
FastMoneyRecap:
This site will be a quick
summary of recommendations
made by the great Fast Money
TV show crew, that will
offer you a unique service,
to compare their picks to
Jim Cramer's past comments
about those stocks.
