Editor's Note: This article was originally published at 7:05 a.m. EDT on Real Money on June 5. To see Jim Cramer's latest commentary as it's published, sign up for a free trial of Real Money.
NEW YORK ( Real Money) -- It's funny how strongly the tape can color your thinking. I had the CEOs of three terrific companies on "Mad Money" Tuesday night, and each firm, in its own way, is problematic at this moment -- but none would be in a more hospitable environment.
First there's Salesforce.com (CRM - Get Report), which just signed a deal to buy ExactTarget (ET), the premier digital marketing company, for $2.5 billion. That's a 53% premium to ExactTarget's closing price the day before, but this is a company that definitely complements Salesforce's existing business.
Sure enough, the market viewed that purchase as a huge overpay -- plus, Barron's came out with a very negative article about what would happen if Salesforce had to replace its stock-based compensation with cash. That all shook the stock to its core, even despite the company's guide-up in its earnings report just last week. It didn't matter that SAP (SAP) and IBM (IBM) had both been rumored to be buyers, and that this would have been a setback for ExactTarget, which has partnered with Salesforce in many situations. Didn't matter that ExactTarget has almost nothing overseas, and that Salesforce can plug ExactTarget's best-in-class technology into its huge foreign network.What mattered was that Salesforce.com -- with its 30% growth rate and terrific operating cash flow -- was now down 20%, trading like a broken growth stock, because it failed to beat and raised huge as it has done so many other times. Or let's take Radian (RDN - Get Report), the mortgage insurer. Here's a company that's a gigantic beneficiary of the housing revival: Many of the so-called bad contracts it had written on homes before the crash are now coming back to life, which is no doubt leading to reversals of reserves. As the losing policies roll off, they're being replaced by new business of considerable size, given that Radian is now the biggest player and home sales are picking up. Radian is setting up for a gigantic 2014. But mortgage rates have ticked up, and that's enough to frighten away the buyers. That's despite the fact that the company just took a look at May and said it was the best month ever, while CEO S.A. Ibrahim has noticed no decline in home-buying because of the rate back-up. So Radian just looks like a stock that's run up huge and is ahead of the fundamentals, even as the fundamentals are literally improving by the day because the bad business regularly rolls off.