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NEW YORK (TheStreet) -- Making snap judgments is a great way to lose money, Jim Cramer told his Mad Money viewers Thursday. Yet, people keep on doing it anyway. Making money involves tedious homework, not assumptions based on headlines alone.
That was certainly the case with Advanced Auto Parts (AAP) - Get Advance Auto Parts, Inc. Report, which reported what was immediately panned as a big miss on earnings. But after closer examination, investors quickly realized earnings were just fine at the auto parts retailer, the company just had short-term integration issues with their CarQuest acquisition. Shares ended the day up 5% after their initial losses.
Then there's Cimarex Energy (XEC) - Get Cimarex Energy Co. Report, which executed a spot secondary offering of six million shares. The markets immediately panicked on the news, before realizing that that deal was opportunistic and not a desperate attempt to raise cash. Shares of Cimarex are now up $11 from where the secondary was priced.
Similar patterns played out with CVS Health (CVS) - Get CVS Health Corporation Report, which made a $12.7 billion acquisition that was panned, then applauded. Likewise with Dollar Tree (DLTR) - Get Dollar Tree, Inc. Report, which missed earnings but only because most of their merchandise is still stuck on boats thanks to the West Coast port strike.
Finally, there's Shake Shack (SHAK) - Get Shake Shack, Inc. Class A Report, a company that Cramer has repeatedly said never to bet against, yet that's exactly what investors keep doing to the detriment of their portfolios.
Executive Decision: David DeWalt
For his "Executive Decision" segment, Cramer spoke with David DeWalt, chairman and CEO of FireEye (FEYE) - Get FireEye, Inc. Report, the cyber security company whose stock has risen 35% so far this year as cyber attacks continue to dominate the headlines.
DeWalt said that America is increasingly vulnerable to attack and hackers are getting more and more interested in all sorts of data, from healthcare to retail, media to financial services. It's a big problem, he said, and only getting worse.
That's why there's a lot of interest in FireEye and in cyber security in general, DeWalt noted. FireEye have been able to grow 10x in just three years and continues to be on a strong path of organic growth as security goes from a "nice to have" to a "must have."
Cramer said companies need to step up and protect themselves and in a few years every business will have cyber security in place.
Look to Health Care Stocks
You have to own a heath care stocks, Cramer told viewers. This industry is ripe with consolidation, and every time there's a deal announced the whole group moves higher.
Case in point: today's announcement that CVS Health is spending $12.7 billion to acquire Omnicare (OCR) , a company that provides critical medical care to seniors, primarily in assisted living facilities.
This deal not only makes perfect sense, it also begs the question, how will Walgreens (WBA) - Get Walgreens Boots Alliance Inc Report, a stock which Cramer owns for his charitable trust, Action Alerts PLUS, respond?
Health maintenance companies are another area where consolidation is likely to strike, as there are too many players and the consumers of these services don't want to deal with so many different providers. The top five companies could easily become three, Cramer noted.
Get Ready for PayPal
It's time for investors to start getting ready for eBay's (EBAY) - Get eBay Inc. Report planned spinoff of PayPal. While the company has yet to set an exact date for the split, it's expected sometime in the third quarter.
PayPal is already the global leader in mobile payments and operates in 203 market around the globe. But PayPal aspires to become a lot more than just a button on a Web site, instead preferring to be seen as the largest open digital payments platform on Earth.
Cramer said it's clear that PayPal and Ebay never belonged under the same roof and he's been a fan of PayPal for years. Once the company is on its own, not only will it be able to partner with eBay rivals like Amazon.com (AMZN) - Get Amazon.com, Inc. Report and Abibaba (BABA) - Get Alibaba Group Holding Ltd. Sponsored ADR Report, but it will also likely be a staple among money managers because the company grew 18.4% in 2014.
In the Lightning Round, Cramer was bullish on Lannett Company (LCI) - Get Lannett Company, Inc. Report, Kythera Biopharmaceuticals (KYTH) , Martin Marietta Materials (MLM) - Get Martin Marietta Materials, Inc. (MLM) Report, Alcoa (AA) - Get Alcoa Corp. Report, Time Warner (TWX) and WhiteWave Foods (WWAV) .
Cramer was bearish on Protein Design Labs (PDLI) - Get PDL BioPharma, Inc. Report, Summit Materials (SUM) - Get Summit Materials, Inc. Class A Report and Hershey Foods (HSY) - Get Hershey Company (HSY) Report.
Am I Diversified?
In the "Am I Diversified" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets.
The first portfolio included ConocoPhillips (COP) - Get ConocoPhillips Report, Kinder Morgan (KMI) - Get Kinder Morgan Inc (KMI) Report, Dow Chemical (DOW) - Get Dow, Inc. Report, Hain Celestial (HAIN) - Get Hain Celestial Group, Inc. Report and Yahoo! (YHOO) .
Cramer said this portfolio cannot have both Conoco and Kinder, especially since Dow Chemical trades along with the oil stocks. He advised selling Conoco and adding Bristol-Myers Squibb (BMY) - Get Bristol-Myers Squibb Company Report along with an industrial stock.
The second portfolio's top holdings included Procter & Gamble (PG) - Get Procter & Gamble Company Report, Apple (AAPL) - Get Apple Inc. (AAPL) Report, J.M. Smucker (SJM) - Get J.M. Smucker Company (SJM) Report, Berkshire Hathaway (BRK.B) - Get Berkshire Hathaway Inc. Class B Report and IBM (IBM) - Get International Business Machines (IBM) Report.
The third portfolio had Skyworks Solutions (SWKS) - Get Skyworks Solutions, Inc. Report, Visa (V) - Get Visa Inc. Class A Report, Illinois Toolworks (ITW) - Get Illinois Tool Works Inc. (ITW) Report, Methode Electronics (MEI) - Get Methode Electronics, Inc. Report and VF Corp (VFC) - Get V.F. Corporation Report as its top five stocks.
Cramer once again suggested Bristol Myers, this time to replace Methode Electronics.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, DOW, KMI, WBA and WWAV.