Cramer's Stop Trading! Natural Gas Reserves Are Not Being Hyped (6/27/11)

Includes: COG, CVX, PVH, RL, UAA, VFC, XOM
by: Miriam Metzinger

Stocks discussed on Jim Cramer's Stop Trading! TV Segment, Monday June 27.

Exxon (NYSE:XOM), Chevron (NYSE:CVX), Cabot Oil & Gas (NYSE:COG), Phillips Van Heusen (NYSE:PVH), VFCorp (NYSE:VFC), Ralph Lauren (NYSE:RL), Under Armour (NYSE:UA)

Cramer expressed doubt about allegations that natural gas companies are exaggerating the amount of reserves. "I question the motivation of the articles," he said. It seems unlikely that Chevron (CVX) and Exxon (XOM) would not have the ability to analyze the situation. The main buyers of natural gas are overseas government-owned companies that would see no benefit in hyping reserves. Cramer doesn't think natural gas prices are going up because there is an oversupply of the fuel, and that is the reason why he would not buy Cabot Oil & Gas (COG), since it is heavily levered to the price of natural gas and won't go higher until natural gas is at $5.50.

Monday's rally happened because of inflation and commodities peaking, and was a delayed reaction to the decline in oil prices. Now that the hedge funds are no longer manipulating the price of oil higher, Cramer would buy retailers such as Phillips Van Heusen (PVH), Ralph Lauren (RL) and Under Armour (UA), since consumers spend more when they pay less at the pump.


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