If stocks are so expensive, why are there so many mergers? That was the question Jim Cramer posed to his Mad Money viewers Monday. While some companies are too big to be acquired, there are thousands that can be bought and many of them are.
Just today we learned that Charles Schwab (SCHW) - Get Free Report is paying $26 billion to snap up rival TD Ameritrade (AMTD) - Get Free Report , giving it the scale it needs to stay relevant and competitive. We also learned that LVMH will add Tiffany (TIF) - Get Free Report to its portfolio of high-end brands. Cramer said LVMH "gets it" when it comes to selling luxury goods in today's tech savvy world.
There are several sectors that are ripe for consolidation, Cramer said. There are too many retailers out there, which makes Foot Locker (FL) - Get Free Report and Nordstrom (JWN) - Get Free Report both attractive. We also have too many software and cybersecurity companies, too many biotechs, too many banks and fin-tech companies. The online food delivery space is in desperate need of consolidation, as are the semiconductors, although many of those will require Chinese approval.
Mergers are a sign of a healthy market, Cramer said, which is why those who say stocks are too expensive aren't valuing companies the way a potential acquirer would.
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Executive Decision: Bristol-Myers Squibb
Caforio explained that as a combined company, Bristol Myers and Celgene can help more patients with strong positions in the treatment of cancer and cardiovascular disease. The new Bristol Myers, he said, is a growth company that's well positioned to succeed.
Bristol Myers is currently in the process of launching seven new drugs, Caforio said, and the pipeline includes 50 drugs that are currently in phase one or phase two testing. He had high hopes for Eliquis, a treatment for atrial fibrillation. He said Eliquis is taking share for those already being treated for A-fib, but there are many patients that have been diagnosed but aren't yet being treated, and many more who have not yet been diagnosed.
When asked about drug pricing, Caforio said that access to affordable medication is an important issue. There needs to be policy changes to make drugs more affordable, he said, and if the industry works together with regulators, they can get more treatments into the hands of more patients.
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Executive Decision: PVH
In his second "Executive Decision" segment, Cramer sat down with Manny Chirico, chairman and CEO of apparel maker PVH (PVH) - Get Free Report , which just posted a strong quarter with a top- and bottom-line earnings beat.
Chirico said that Hong Kong and greater China remains a challenging market for PVH. In Europe, however, sales are strong, with Tommy Hilfiger performing exceptionally well and the Calvin Klein brand also growing.
In the U.S., apparel remains a mixed bag, Chirico said. There hasn't been much cold weather to spur people into buying winter apparel yet, and the Heritage brand remains challenged, particularly at mall-based retailers like Macy's (M) - Get Free Report , Kohl's Stores (KSS) - Get Free Report and JCPenney (JCP) - Get Free Report . Heritage only represents 10% to 12% of PVH sales, Chirico added, and he thinks the damage has been contained.
Turning to the topic of trade, Chirico said he understands the uncertainty in the share price and why the stock sells for just 10 times earnings. He said it's almost Dec. 1 and they have no idea what tariffs they will be paying on Jan. 1. That didn't stop Chirico from personally buying $10 million worth of stock earlier this year, however. He said he's taking a long-term view and is confident the company will be in great shape.
Off the Tape: Carbon
In his "Off The Tape" segment, Cramer sat down with Ellen Kullman, president and CEO, and Joseph DeSimone, executive chairman, of the privately-held Carbon, a company working on the next-generation of 3D printing technology.
For years, 3D printing has been billed as the future of manufacturing, but in reality, the technology has been used primarily for prototyping and not actual manufacturing. But DeSimone said Carbon has finally "cracked the code," making the process faster, with new materials and a new business model that makes manufacturing a reality.
Carbon is already manufacturing auto parts and electrical connectors, DeSimone said, and the company has a partnership with Johnson & Johnson (JNJ) - Get Free Report for the development of a mesh to be used for post-surgical applications to help patients heal their wounds.
U-Turn for Uber?
Cramer said Monday's news that the company has run afoul of regulators in London initially tanked the stock, but shares quickly rebounded. The situation might not be as bad as many people feared, he said, and the service will remain active pending appeal.
Beyond London, however, Cramer said the good news at Uber is the stock's lockup period is now over and those who wanted to sell likely already have. Additionally, the company might be willing to shed underperforming businesses, like UberEats, and focus on making its core business profitable.
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At the time of publication, Cramer's Action Alerts PLUS had a position in KSS, JNJ.