'RealMoney' Radio Recap: Merger Mania

As Jim Cramer asked Wednesday on his "RealMoney" radio show, what's so good about mergers and acquisitions? In a word: "excitement."

Specifically, it's the excitement of a quick payoff, said Cramer. For example, the news Wednesday that Constellation Energy Group (CEG Quote) is in talks to be acquired by FPL Group (FPL Quote) sent Constellation's stock up about 10%. Burlington Resources (BR Quote) got a bid from ConocoPhillips (COP Quote) on Monday, and Burlington's stock is up about 13% since.

More than excitement, though, takeovers are bullish for the market for several reasons, said Cramer. First, investors buy the stocks of companies that may be the next takeover targets. Second, takeovers and the threat of takeovers keep short-sellers more at bay because shorting stocks becomes more risky, he said. Finally, shareholders of acquired companies have fresh cash that they can then redeploy back into the stock market.

What's unique about this round of takeovers, said Cramer, is companies are being acquired even though their stocks have had good runs. Normally, it is underperforming stocks that are takeover targets, he said. That shows the strength of this market, said Cramer, and it's just another reason to own stocks, he said.

Am I Diversified?

In his weekly "Am I Diversified?" segment, Cramer had these things to say about stocks in callers' portfolios.

Whole Foods Market (WFMI Quote): Cramer is a fan of the stock because "healthy eating is so important."

T. Rowe Price (TROW Quote): "One of my favorite stocks for a very long time."

Toyota Motor (TM Quote): Sell General Motors (GM Quote) and buy Toyota.

Motorola (MOT Quote): Cramer is looking to buy more.

Oil States (OIS Quote): "Very good ... I really like it."

Kellogg (K Quote): It's doing well, but Cramer prefers General Mills (GIS Quote).

Procter & Gamble (PG Quote): "Knocking the cover off the ball."

Allscripts Healthcare Solutions (MDRX Quote): The stock has been somewhat "forgotten about," said Cramer, but he still believes it's great.