Jim Cramer's 10 Favorite Alternative Energy Stocks

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Includes: APA, CHK, CLNE, EOG, GM, LINEQ, NRG, PPO, RDS.A, SD, WPRT, XCO
by: Dividendinvestr

With oil prices declining, Jim Cramer has been recommending other energy plays for a diversified portfolio. The oil companies listed were done so for their significant natural gas production. Here are the 10 alternative energy stocks that Jim Cramer likes:

Westport Innovations (WPRT): Cramer recommended this energy company for its leading role in the future of natural gas. Westport converts petroleum-fueled engines into those that can run on liquefied natural gas. They recently made a deal with General Motors (GM) to make light-duty natural gas vehicles and launched a co-marketing program with Royal Dutch Shell (RDS.A) to form the North American market for liquefied natural gas powered vehicles.

Because of the recent 19% run-up, Cramer is expecting a pullback and recommends buying the stock when this happens. Westport has a $201 billion market cap, yields 5% and trades at 7 times earnings. George Soros of Soros Fund Management owns over 5 million shares.

Sandridge Energy (SD): This Oklahoma-based natural gas and oil company reported a bad quarter and while Cramer would like to stick with the company, he expressed concern and recommended going forward with caution until more information emerges.

EOG Resources (EOG): A domestic oil and gas producer that 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 has increased buying of EOG.

Clean Energy Fuels (CLNE): Cramer likes Clean Energy Fuels for a play on natural gas. CEO Andrew Littlefair said the private sector is moving forward to make natural gas a significant part of the United States’ energy future and is not waiting around for the government to pass the Natural Gas Act; although it would certainly boost investors confidence. Clean Energy has a $796 million market cap. 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 of SAC Capital Advisors picked up a large number of CLNE shares.

Apache (APA): Cramer was asked if there were other natural gas stocks he’d rather own. Cramer stated that Apache was a great company and had the best growth profile, except for maybe Chesapeake Energy Corp (CHK).

Chesapeake (CHK): Chesapeake announced that it is investing $1 billion in natural gas, which makes Cramer like the stock that much more. The energy company has a $21 billion market cap and yields 1.1%.

Polypore International (PPO): Cramer recommended this energy and battery company when a viewer asked about how to play lithium stocks in this energy shortage. Richard Driehaus of Driehaus Capital increased his position in PPO by 51%.

NRG Energy (NRG): Cramer likes this utility company because it has “real vision”. NRG Energy helped the NFL’s Washington Redskins create a solar-powered stadium and has a diversified portfolio of energy (including nuclear power, natural gas, coal, wind and solar). Cramer gave the stock a buy recommendation, partly because the recent buybacks were due to the stock’s low price and not because of a disbelief in dividends.

EXCO Resources (XCO): Cramer thinks the price of this energy stock is too low to ignore and suggests using it as an opportunity to get a position in natural gas. EXCO Resources trades at 28 times earnings, yields 1.3% and has a $2.58 billion market cap.

Linn Energy (LINE): Cramer gave this energy company a buy recommendation in spite of oil and gas prices declining. While Linn operates in oil, 45% of the company’s production was natural gas and 19% was natural gas liquids; with only 36% being oil. Cramer said he’s not as big of a bear on oil as others have been lately. Linn Energy yields 7.5% and has a $6.45 billion market cap.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.