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The Treasury department may have done us all a favor, Jim Cramer told his Mad Money viewers Wednesday. By blocking the mergers of Pfizer (PFE) - Get Report and Allergan (AGN) - Get Report as well as Halliburton (HAL) - Get Report and Baker Hughes (BHI) , Treasury has just unleashed a wave of takeover speculation.
Cramer reminded viewers that not only investors buy stocks, other companies do. In the biotech space, the two biggest acquirers were Allergan and Valeant Pharmaceuticals (VRX) . Ever since Allergan received a takeover bid for itself and Valeant self-destructed, takeovers all but dried up.
But Allergan CEO Brent Saunders says now that the Pfizer deal is done, Allergan is once again looking for growth to acquire, news that sent the group sharply higher.
In fact, all of the stocks Cramer featured on last night's show were all up big on the day, including Regeneron (REGN) - Get Report , up 5.2%, Celgene (CELG) - Get Report , up 5.9%, and Biogen Idec (BIIB) - Get Report , up 5.2%.
Meanwhile, in the oil patch, the blocked merger sent Baker Hughes rallying 8.8%, with Halliburton rising 5.9%.
Treasury did us a favor, Cramer concluded, even if it was totally by accident.
Cramer Plays Matchmaker
Cramer said there's a lot to like about KB Home. The company beat on its top and bottom lines when it last reported, it has a ton of land on which to build and it has a small market cap. On the down side, however, KB also has $2.6 billion in debt on its balance sheet.
But perhaps most intriguing about KB Home is the company's tremendous buyback, which constitutes 10 million shares, or a full 10% of the current share count. Investors learned last month that KB wasted no time buying back its shares, buying over eight million of those shares in just three months. The company's book value is now $19.22 a share, far higher than the stock's current $14 price tag.
Cramer on Broadcom
The Broadcom and Avago tie-up closed just two months ago and shares are up 14% since the deal was first announced last May. The company expects to see over $750 million in cost savings and the deal is immediately additive to Broadcom's bottom line.
But Cramer said there's a lot more to like about the $37 billion deal. He said the combined company is now less levered to wireless, which is expected to decline from 32% to 22% of sales, but gains exposure to the data center space, which is red-hot.
No matter how you look at it, Cramer said Broadcom, now the third-largest chipmaker, is a rock star, yet trades at just 12.3 times earnings, the same as the far less exciting Intel (INTC) - Get Report .
Giving the stock a more worthy 18 times multiple, Cramer said shares of the new Broadcom should be trading near $226 a share, for a 43% gain from current levels.
Executive Decision: Dr. Philipp Lang
For his "Executive Decision" segment, Cramer once again sat down with Dr. Philipp Lang, president and CEO of ConforMIS( CMFS) , the joint replacement company with cutting-edge technology.
Lang provided an update to the recall announced last August, clarifying the issue involved an outside vendor. Those issues were resolved within two months, as ConforMIS predicted. He said that ConforMIS is once again focused on top-line growth, where things continue to go as planned.
Lang also commented on the new Medicare rules that hold hospitals accountable for outcomes, including rehabilitation and post-op care. He said ConforMIS patients walk faster after surgery, are more satisfied and need less rehabilitation, which makes them the logical choice for hospitals and doctors going forward.
Cramer called ConforMIS speculative given its size, but said the company continues to deliver on its promises.
In the Lightning Round, Cramer was bullish on Walmart (WMT) - Get Report , Costco (COST) - Get Report , RPM International (RPM) - Get Report , Johnson Controls (JCI) - Get Report , Broadridge Financial (BR) - Get Report and Acadia Pharmaceuticals (ACAD) - Get Report .
No Huddle Offense
In his "No Huddle Offense" segment, Cramer sounded off against the analysts warning the consumer packaged goods stocks are overvalued.
Is a stock like General Mills (GIS) - Get Report , which has risen from $55 to $64 a share over the past year "dangerous?" Cramer said he doesn't think so. He said the problem with General Mills is that it's slow, steady and lacks the pizazz needed to keep analysts interested. The fact is that every time the stock weakens, buyers swoop in and buy more.
That's why Cramer said he'd be a buyer of General Mills on any market-induced weakness that occurs first thing in the morning or late in the day, during times when companies are not allowed to be buying back their own shares.
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At the time of publication, Cramer's Action Alerts PLUS had a position in AGN, BIIB and COST.