On tonight’s MAD MONEY on CNBC, Jim Cramer said the decline in the oil service stocks because it was a nice day is wrong and he said you can’t think that way. You have to look over the data more than a day and you can’t look at it on its own. You have to look at the enterprise on the basis of how its customers are doing. So Cramer decided that the integrated oils are too hard to decide on because of tough comparisons year over year and earnings will be lower. The only one he will recommend right now is BP Plc (BP-NYSE) out of the huge integrated oils.
The drillers and service stocks are the only ones he likes in the oil patch right now because this is the only safe and only profitable place to be. The integrated oils are increasing their cap-ex projections after thinking oil prices would come back down. Exxon (XOM) said this and he thinks ConocoPhillips (COP) and Chevron (CVX) will have to say they are picking up drilling and cap-ex. This is pertaining to the DEEP WATER OIL DRILLERS: He gave 3 picks that are #3 to #5….. Schlumberger (SLB) is the best one under the stars to him; the best rig maker in this is National Oilwell Varco (NOV); GlobalSantaFe (GSF) is one as well for their buyback and looking for deals.
His two best plays he made after the first break:
He noted Halliburton (HAL) that is being punished by the media and the public for moving one its headquarters to Dubai. HAL has been losing business globally to SLB because of the American fallout from an administration. Its tender offer is something helping the stock, but Cramer wants you to hold on and not sell into the self-tender. He said if it is treason what they are doing, you can make money off it.
Transocean (RIG) is his favorite play in oil patch. They are the best in deep water drilling and has the highest day rates. He thinks that RIG could either be acquired or merged into a larger entity. You can even wait until Friday to buy the stock because options expiration this Friday may hold the stock down. He said this should gravitate toward that $75.00 strike on Friday as a result of options.
In a call-in, Cramer said that Exxon (XOM) is being owned for its buyback. In another call-in Cramer said he likes Canetic Resources Trust (CNE) in the Canadian Oil Trusts.
Jon C. Ogg
March 12, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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