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Cramer's 'Mad Money' Recap: Toxic Bond Auctions (Final)

Revenues Are Key

In the "Executive Decision" segment, Cramer spoke with Marc Benioff, chairman and CEO of Salesforce.com (CRM), a high-flying stock that delivered a three- cent-a-share earnings beat on a 36% rise in revenues. Shares of Salesforce were sharply lower in after-hours trading, as some of Salesforce's metrics didn't meet expectations.

Benioff touted the quarter as "fantastic," saying that Salesforce just issued 2013 guidance that will put the company at $3 billion in revenues. He said that Salesforce remains the heart and soul of many companies information management systems and there's been tremendous uptake in their latest mobile and social initiatives.

Benioff also explained that Salesforce is still in a growth mode and is focused on revenues and market share, not necessarily earnings. He said that the company's revenue guidance, such as $3 billion by 2013, is the best way to measure the company's success. Benioff clarified that there is no bookings shortfall, something that troubled analysts on the company's conference call.

Cramer said that Salesforce is a fabulous growth company, but noted that investor need to balance the growth vs. earnings equation themselves.

Overseas Edge

Continuing with his "Stock Supermarket" series comparing the valuations of similar companies, Cramer looked into Starbucks (SBUX) vs. Dunkin Brands (DNKN) to see which coffee purveyor should be filling up investors' portfolios.

On the surface, it would appear that Starbucks is the more expensive stock, trading at 24 times earnings vs. 22 times earnings for Dunkin. However, using the PEG Ratio, a company's multiple divided by its growth rate, investors see a different story.

Starbucks is growing at 18%, which gives it a PEG Ratio of 1.3, while Dunkin is growing at 15%, giving it a PEG Ratio of 1.4. Given that the companies are almost even, Cramer said that makes Starbucks the cheaper play, as you're getting a better company for roughly the same price.

Dunkin grew same-store sales by only 5.6% in its most recent quarter, but Starbucks was able to deliver 9% growth during the same period. Cramer said that Starbucks real strength is in its international growth, where the company has 6,000 locations, 500 of which are in China. The Chinese store count is expected to grow to 1,500 locations, giving Starbucks the clear edge over Dunkin, which is mainly focus on U.S. growth.

Cramer said he predicted that Dunkin shares would languish after its IPO, and they have. He cited insider selling as another reason why investors should drop Dunkin and pick up some Starbucks instead.

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