Jim Cramer's 7 Favorite Energy Stocks

by: Insider Monkey

Jim Cramer is the host of CNBC's "Mad Money" and the chairman of TheStreet.com. In 1987, Cramer started his own hedge fund and returned an average of 24% per year between 1987 and 2001. Cramer also authored six money management books.

During the last week, the energy stocks he recommended on “Mad Money” were as follows:

  1. EOG Resources (NYSE:EOG): Cramer rated this stock as a buy twice last week. This domestic oil and gas producer reported a terrific quarter and beat estimates by $0.32. Cramer feels this is a growth stock that is poised to do well when oil prices bottom. T Boone Pickens of BP Capital has increased buying of EOG (see more of BP Capital’s holdings here). Cramer stated that EOG Resources is the most underrated stock in the oil market. This market is giving EOG too little recognition for the company’s assets (considering BHP Billiton’s (NYSE:BHP) willingness to purchase Petrohawk (NYSE:HK) for $12.1 billion) and is providing a chance to own one of Cramer’s “absolute favorite stocks”.
    EOG earned $1.11 per share, beating estimates by $0.32 cents per share. The company doesn’t need high crude prices to maintain earnings, as it has ample new production.
  2. ConocoPhillips (NYSE:COP): Cramer favors COP because it is the highest-yielding major oil company. High yields in a solid market is a hard combination for him to turn down. Despite having discovered a significant amount of oil, Cramer preferred COP over Statoil ASA (NYSE:STO) because of the high yield that that will be backed up by growth. ConocoPhillips trades at 8 times earnings and yields 4%.
  3. Con Ed (NYSE:ED): This New York based utility company operates in one of the few areas of the country with a stable housing market. The stock is yielding over 4.5% and the company has paid out dividends for 37 consecutive years.
  4. Clean Energy Fuels (NASDAQ:CLNE): Cramer had Clean Energy Fuels’ CEO, Andrew Littlefair, on the show to discuss natural gas’ future as an alternative fuel source and the company missing earnings estimates. Littlefair said that while the Natural Gas Act is stuck in Washington D.C., the private sector is moving forward.
    The company has plans to roll out 150 new stations over the next couple of years. If you feel natural gas is the future, Cramer feels this is the stock to own. Steve Cohen's SAC Capital Advisors picked up a large number of CLNE shares. (Check more of Cohen’s picks).
  5. Core Labs (NYSE:CLB): is preferred by Cramer over CARBO Ceramics (NYSE:CRR) because it is more consistent. He also said Clean Harbor (NYSE:CLH) is a good alternative. Carbo Ceramics is a fracking company that is down 30% from the 52-week high, despite all of the recent oil shale discoveries.
  6. Enterprise Products Partners (NYSE:EPD): This pipeline operator is a favorite of Cramer’s because of it’s high, safe yield of 6%. The demand for this pipeline has remained steady since 2008. John Osterweis of Osterweis Capital Management has a large position in EPD shares. (Find more of John Osterweis' holdings here).
  7. Walter Energy (NYSE:WLT): Cramer admitted that he called this one wrong. He recommended this stock on the belief that it would be taken over. Not realizing that earnings would be this bad, Cramer recommends waiting until the stock falls about 5 points lower and then buying it. This energy stock currently trades at 11 times earnings and only yields 0.6%.

Disclosure: I am long COP.