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NEW YORK (
) -- Jim Cramer told viewers of his "Mad Money" TV show Monday that computer-maker
is no longer a company, but rather "the punchline of a bad joke."
Cramer said that today's announcement of the company's acquisition of
is a desperate, and incredibly poor, attempt to play catch-up to rival
, which purchased EDS in October, 2008.
Cramer said H-P, a stock which he owns for his charitable trust,
Action Alerts PLUS, made a brilliant move in buying EDS, as it allowed the company to expand into lucrative, recurring consulting revenues while significantly cutting costs. The deal also allowed the company to expand internationally, he said.
Cramer said Dell, on the other hand, bought the worst possible company at the worst possible price. He said H-P paid 60 cents on the revenue dollar for EDS, while Dell is offering to pay $1.60 per revenue dollar. The deal is also dilutive to earnings until 2012 and gives the combined companies few synergies or cost savings, said Cramer.
Cramer said the difference between Hewlett and Dell is now staggering. Dell's marketshare is slipping, from 19% to just 14%, while H-P's share is increasing, from 15% to over 20% currently. Dell is not thinking strategically, said Cramer.
According to Cramer, the company would've been better off buying smartphone maker
, whose business is growing, rather than Perot, who reported declines in all of its business units last quarter.
Cramer said while analysts may applaud the move, they simply don't see the big picture. At 30-times earnings, this deal was highway robbery. He said it's not too late to swap out of Dell, and into H-P, if for some reason, you're still long Dell.
In the "Executive Decision" segment, Cramer spoke with Charles Bunch, chairman and CEO of
, to find out if the chemicals and coating business really is as good as Cramer predicted.
Bunch confirmed that things are indeed better at PPG than they were just a few months ago, saying that he's seeing a gradual improvement in Asia and the U.S. He said there's been a lot of pessimism surrounding this recovery, but added that the world will eventually see light and come to embrace it.
When asked about PPG's workforce, Bunch said the bulk of the company's layoffs and restructuring has been completed and he expects that a year from now, he'll have more workers on the payroll than he does now.
Also on a positive note, PPGs expansion into Europe through acquisitions. Bunch said the company is ahead of its revenue and synergy plans, and the weaker dollar is helping to accelerate PPG's growth in that region of the world.
Finally, when asked about the automotive business in particular, Bunch said autos in China are "on fire," while here at home, Cash For Clunkers has helped a lot to clean out inventories and spark some energy into the sector.
Cramer applauded Bunch for his efforts at PPG and said the company is a buy.
Investors looking to cash in on the hottest IPO of the season need to travel all the way to Hong Kong, said Cramer, where
is preparing to spin off 25% of its Macau properties.
But Cramer said investors shouldn't invest in the IPO itself, as that involves too much risk. Instead he said he's sticking by his July 21 call to buy Wynn Resorts itself, despite the fact the stock has run up 70% since that call.
Cramer said there's likely to be some profit taking in Wynn, and that will be investor's cue to buy in ahead of the IPO. "There's still room to go higher," said Cramer, but only after the hype surrounding the IPO, dies down.
So what's so compelling about Wynn's Macau business? Cramer said the company plans to offer 1.25 billion shares representing 25% of its interests in Macau. That values Macau at $7.2 billion. But Wynn overall is only valued at $11.6 billion, meaning its Las Vegas operations are sizably undervalued at just over $4 billion.
Cramer said he would not be surprised to see the Macau IPO rise to be worth more that the overall value of Wynn. He said he's sticking to his $90 price target for the stock, but only after an initial retracement to the $64 to $65 level.
Cramer followed up
, a stock that stumped him in last week's lightning round. He said the company, which makes signaling equipment for the military and government agencies, was a winner.
Cramer told a second viewer that
is stuck in the mud, but drugstores like
would be a great play on the upcoming flu season.
Cramer was bullish on
Chipotle Mexican Grille
He was bearish on
Melco PBL Entertainment
Capital One Financial
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At the time of publication, Cramer was long Hewlett-Packard.
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