Jim Cramer's 'Mad Money' Recap: Apple Is a Bargain

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NEW YORK ( TheStreet) -- Are there bargains still to be had in this red-hot market? Jim Cramer asked his "Mad Money" viewers Monday.

He said there is one stock that's not up for the year, one that yields 2.3% and trades at just 12 times earnings despite a remarkable growth rate. That's the stock of Apple ( AAPL), a stock Cramer owns for his charitable trust, Action Alerts PLUS.

Cramer said Apple just received an analyst upgrade today, one that made a remarkable amount of sense. That upgrade cited higher iPhone sales, higher gross margins and some signs of Android weakness as the main drivers for Apple, but Cramer said there's a lot more to like about Apple.

Cramer noted that Apple has a big catalyst coming with its expected iPad announcement tomorrow. That announcement should put the company in a position to have a strong holiday season.

Additionally, Cramer said Apple's board has a lot of options it could take before the company's next earnings call on Oct 28. He said if Apple really wanted to turbocharge its share growth, it could split the stock 4:1 and increase the dividend. Both those moves would make Apple shares more attractive to retail investors and less of a target for the shorts, he said.

With all of these things going right, Cramer said there's simply a lot more to like about Apple than there is to dislike at current levels.

Executive Decision: David Cote

In the "Executive Decision" segment, Cramer sat down with David Cote, chairman and CEO of Honeywell ( HON), an Action Alerts PLUS holding that's up 41% since Cramer last spoke with Cote in November. Honeywell just posted an earnings beat of 1 cent a share but lowered its full-year revenue forecasts.

Cote said Honeywell did exactly what it said it would this quarter. He noted the sales miss stemmed from the timing of a big acquisition closing and a slowdown in defense spending related to the government shutdown and sequester. There's no cause for concern because growth overall remains on track, he added.

Among the bright spots for Honeywell are aerospace, where the company plays in the mid- to large-size business jet market, along with its performance materials and refining businesses. Cote detailed Honeywell's modular refining products for oil shale drillers, which offers on-site oil and gas processing in as little as a one acre site, and the equipment can be constructed in as little as 60 to 90 days. That market, he said, is growing worldwide.

Other areas of opportunity for Honeywell include energy conservation, where Cote said many buildings can still save 20% to 25% on their energy bills just by using the latest HVAC and insulating technologies.

Finally, when asked about Cote's efforts to reform Washington with FixTheDebt.org, Cote said there are now over 100 CEOs participating in the initiative. If everyone works together, our nation's debt problem can be solved, he said.

Expectations and Reality

Earnings season is all about expectations, Cramer reminded viewers as he highlighted what happens when a company surprises to the upside and what happens when expectations far exceed reality.

Shares of General Electric ( GE) popped 2.3% when it reported a quarter where sales were essentially flat. How can that happen? Cramer said it's because stocks trade on expectations, and those for GE were tepid at best.

Everything at GE ticked in the right direction this quarter, Cramer explained. Sales in Europe were a little better and the company's margins expanded slightly. More important, GE continues to scale back its GE Capital division, which once just served as a financing option for its expensive industrial goods, but recently became not only a sub-prime lender but also a big landholder in off all places, Europe.

Cramer said the scaling back of GE Capital has not only been a big mental boost for the company and its shareholders, but it's also allowed GE to get back to what it does best -- aerospace, power generation, locomotives, health care, oil and gas and more.

But just as companies can soar on lowered expectations, they can also plummet on soaring ones. That was the case with Stanley Black & Decker ( SWK), which saw its shares fall 14% after its earnings popped on what was essentially a tax gain. Deep inside the numbers were weakness in Stanley's security division and its government sales, both of which were thought to be only a small percentage of sales.

So while GE is getting back to its roots as a great industrial company, Stanley is leaving its mainstay as a first-rate tool maker to become an ailing security company. Cramer said GE could see shares hit $30 a share, while Stanley shares will likely do nothing until that company can split itself up or turn itself around.

Lightning Round

In the Lightning Round, Cramer was bullish on BioMarin ( BMRN), ViaSat ( VSAT), Starwood Property Trust ( STWD), Kodiak Oil & Gas ( KOG), Union Pacific ( UNP), ChannelAdvisor ( ECOM) and Salesforce.com ( CRM).

Cramer was bearish on BlackBerry ( BBRY) and Lululemon Athletica ( LULU).

Scaling the Tower

The wireless tower business is transforming into a happy oligopoly, Cramer told viewers, and that should be music to investors' ears.

Cramer said today's announcement that Crown Castle ( CCI), our country's largest cell tower operator, is buying 600 towers from AT&T ( T) is just another in a wave of consolidation that is making tower companies hot commodities.

Just a few months ago, American Tower ( AMT), the number two player, announced that it was buying the number five player, in what will certainly be a continuing trend, said Cramer. While Crown Castle's shares got dinged by 1.7% on today's announcement, Cramer told viewers these are high-quality assets, ones that will be paying off for shareholders for years to come.

In addition to the consolidation, Cramer said that Crown Castle is also following in American Tower's footsteps and converting itself into a REIT, meaning even more rewards for shareholders. But more important are the commitments by all four of America's wireless carriers to invest substantially in 4G and LTE services over the next few years. This huge pickup in spending will only mean additional revenue for the tower operators, Cramer said.

Crown Castle may trade at 49 times earnings, Cramer concluded, but with a 45% growth rate, shares remain inexpensive.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer told viewers that tomorrow the focus will once again turn towards Washington -- but it might not be a bad thing.

Cramer said Tuesday's labor numbers will certainly be a reason for investors to sell stocks. Numbers too good will mean the Federal Reserve needs to taper its bond buying while numbers too low will signal just how hopeless the government is at rectifying the situation. Either way, investors will be taking profits, cooling off a red-hot earnings season.

But that's been the pattern, Cramer noted. Strong earnings lead to record stock prices then Washington puts on the brakes, allowing investors to take profits and get back in at better prices.

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

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-- Written by Scott Rutt in Washington, D.C.

To email Scott about this article, click here: Scott Rutt

Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, HON and UNP.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com 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 TheStreet.com, 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 TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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