Jim Cramer, portfolio manager at Action Alerts PLUS, sat down with research director Jack Mohr to discuss the Action Alerts PLUS portfolio as they enter into the second half of the year. The portfolio has been up 2.4% while the S&P has been up only 0.2%, but as Mohr points out, the one sector that has been lagging has been in energy. There are five oil companies in the AAP portfolio: Occidental Petroleum (OXY), Marathon Oil Corp (MRO), EOG Resources (EOG), Energy Transfer Partners (ETP), and Schlumberger (SLB). Cramer and Mohr like these oil names for their excellent market position and leadership and their ability to wade the current storm of low oil prices and political instability. Cramer says that these stocks are valued as if the price of oil were in the low $40’s despite the fact that the price of oil is now over $50. Cramer says that even if the price of oil were to drop below $50, it would not hurt the valuations for these stocks much. But what Cramer really likes about the space is that ‘there’s going to be mergers here’ because ‘the stocks are too cheap.’
More from Video
Amid the Selling, Here's the Big Question Now
How quickly do we find support, is what we'll want to know now, as the correction is occurring while economic optimism builds.
One Tweet Pulls the Rug Out From Under the Indexes
Despite the president's promise of no stimulus until after Nov. 3, there are no signs yet that this is the sort of correlated selling that leads to a deep correction.
A Technical Look at the New Dow Jones Industrial Average
Salesforce, Amgen and Honeywell will give a lift to the DJIA going forward.
Conagra Brands Looks Tastier After Its Upgrade to Buy
CAG has hung onto the bulk of its recent gains, and could rise to the $50 area, according to the charts and indicators.
Biogen Bulls Get a Lift From Quant Upgrade and Strengthening Charts
Breaking down an approach to the long side of this biotech stock.
Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation.
If you have questions, please contact us here.