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  1. Home
  2. / Investing
  3. / Energy

Cramer: Many Oil Names Could Be on Slippery Slope

A bunch of oil stocks have gotten ahead of themselves and are particularly vulnerable if crude stalls.
By JIM CRAMER Aug 16, 2016 | 04:25 PM EDT
Stocks quotes in this article: WLL, MRO, OXY, SLB, PLAY, NOV, VG

The oil stocks are experiencing one of the great bull runs of the year. I just wish that you could say the same about crude. You get an 8% run in crude and you give every little flotsam-and-jetsam oil company -- a Resolute Energy REN, a Whiting Petroleum (WLL) , a Marathon Oil (MRO) -- the go ahead.

Does this make sense?

Only if it turns out that these stocks were reflecting bankruptcy and now they are reflecting oil going to $60.

I don't think that's a go. We have seen a moderate pickup in demand. We have seen no decline in supply of late. So the idea that we can ramp through $50 without some exogenous event seems fanciful.

I don't want to short these stocks. In fact, I think that Occidental (OXY) and Schlumberger (SLB) are buys, as seen by the fact that they both are part of our Action Alerts PLUS charitable portfolio. 

I am just amazed that no one is downgrading these stocks on valuation based on the fact that the stocks have gotten ahead of themselves if, indeed, oil stalls here.

I say don't chase.

If Carley Garner is right, they are all a better sell than a buy right now, and I think she's bankable on this overstretched move on crude.

Random musings: I'd like to call attention to a handful of very good stories on our site. They include a Fill and Kill piece by Tony Owusu on Dave and Buster's (PLAY) , a James Gentile piece on National Oilwell Varco (NOV) , a piece by James Passeri on private equity and valuation danger zones, and Anders Keitz's piece on Vonage (VG) . Check them out.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Jim Cramer's charitable trust Action Alerts PLUS was long OXY and SLB.

TAGS: Investing | U.S. Equity | Energy | Markets | Stocks

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