RealMoney Radio Recap: Consolidating Gains

"The stock market is seeing a number of companies make multibillion dollar acquisitions, mergers and leveraged buyouts," Jim Cramer told his "RealMoney" radio show listeners Monday. "We have to talk about it because there's lots of ways to win."

He said that he generally likes consolidation because it is much easier for companies to win as competitors disappear. Plus, the remaining players get revalued upwards and are worth more, since they'll do better in an environment with less competition.

Buy the companies that benefit from the consolidation, Cramer said.

He began in banking with news that Wachovia(WB Quote) is striking West by purchasing Golden West(GDW Quote) for $25 billion. This will extend the bank's business to mortgages and make it more of a national bank, said Cramer.

Now that Golden West is out of the game, he said to take a look at Downey Financial(DSL Quote), the next-cheapest bank stock. Cramer said that it's not a great bank, but that it's a "great customer bank."

He also to look at Accredited Home Lenders(LEND Quote), which he believes has the best loan management.

In health care, the two largest scientific tool companies -- Fisher Scientific(FSH Quote) and Thermo Electron(TMO Quote) -- are merging in a $10.6 billion deal. Together, the companies will be the primary supplier of goods and services to academic and government scientific labs.

He said to look at Millipore(MIL Quote) and Agilent(A Quote), which are also in the business of laboratory tools and technologies.

Consolidation is brewing in minerals, too, he said. Teck Cominco has put in a $16 billion bid for Inco(N Quote), the largest maker of nickel in the world. The deal is contingent upon Inco scuttling its takeover of Canadian miner, Falconbridge(FAL Quote).

Cramer said that investors could jump into the fray and start buying Inco or Falconbridge, but that he would take a look at BHP Billiton(BHP Quote). The company, which he owns for his ActionAlerts PLUS charitable trust portfolio, is involved in iron ore, nickel and copper.