Cramer's 'Mad Money' Recap: Dell's Horrible Choice of Perot

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NEW YORK ( TheStreet) -- Jim Cramer told viewers of his "Mad Money" TV show Monday that computer-maker Dell ( DELL) 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 Perot Systems ( PER) is a desperate, and incredibly poor, attempt to play catch-up to rival Hewlett-Packard ( HPQ), 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.

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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 Palm ( PALM), 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.

Improving Conditions

In the "Executive Decision" segment, Cramer spoke with Charles Bunch, chairman and CEO of PPG Industries ( PPG), 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.

Casino Play

Investors looking to cash in on the hottest IPO of the season need to travel all the way to Hong Kong, said Cramer, where Wynn Resorts ( WYNN) 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.

Mad Mail

Cramer followed up Applied Signal ( APSG), 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 Wal-Mart ( WMT) is stuck in the mud, but drugstores like CVS Caremark ( CVS) would be a great play on the upcoming flu season.

Lightning Round

Cramer was bullish on Ivanhoe Energy ( IVAN), Wendy's/Arby's Group ( WEN) and Chipotle Mexican Grille ( CMG).

He was bearish on Melco PBL Entertainment ( MPEL), KBR ( KBR), Kroger ( KR) and Capital One Financial ( COF).

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here.

For more of Cramer's insights during the Lightning Round, click here .
At the time of publication, Cramer was long Hewlett-Packard.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or is related to the specific opinions expressed by him on "Mad Money."

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Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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