It's a Buyer's Market

Why aren't there more deals like Agilent's (A - commentary - Trade Now) buy of Varian (VARI - commentary - Trade Now) happening? Agilent's been in a rut for some time, its last quarter really nothing to write home about -- it caused a 3% drop in the stock. No matter what Agilent seemed to do, it always appeared to be just another test and measurement company with cyclical exposure ... too much cyclical exposure. The key to getting beyond oscilloscopes -- think origins as part of Hewlett-Packard (HPQ - commentary - Trade Now) -- was to get bigger in life sciences technology.

That's just what they did this morning with Varian, and it is a terrific achievement that will move the needles and make Agilent worthy of owning with real growth.

At first glance, Agilent's paying a steep price vs. where the stock was in the spring. But if you check where it has been, you would recognize that this isn't all that expensive and that anyone who bought anything in the March decline would have looked brilliant.

The question is, why aren't more companies doing deals here? When the deals have been announced -- whether it be the myriad Johnson & Johnson (JNJ - commentary - Trade Now) deals, the Bristol Myers (BMY - commentary - Trade Now) deal last week for Medarex (MEDX - commentary - Trade Now) or the Agilent deal itself -- the acquirers all go up! That's what any buyer would want to see.

I do not understand a lot of things about this market, but the main one I don't get is how companies don't see that this is the time to buy to get growth and to consolidate work forces (read: layoffs). I know that the Justice Department will increase scrutiny on deals, but these are not the kind of deals that would seem to even cause Justice to take a second look, in that they are not consumer-oriented, which seems to be the main criterion.

A smart deal. Should breed more.

At the time of publication, Cramer was long Bristol Myers and Hewlett-Packard.

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