Jim Cramer's 'Mad Money' Recap: Prices Matter

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NEW YORK (TheStreet) -- When stocks get hammered, they get cheaper, Jim Cramer reminded Mad Money viewers Monday. Prices matter, he said, which is why it appears that the momentum stocks may finally be bottoming.

Make no mistake, this market still values earnings per share and big dividends, Cramer said. But in the case of the once-high-flying momentum names, they now have a few things pulling in their favor.

The first positive for the momentum names is their price. A stock like Yelp (YELP) was pretty expensive a few weeks ago at $101 a share, but in the low-$50's that might make it attractive to a potential acquirer like Yahoo! (YHOO).

The same applies to Tableau Software (DATA), which once traded at $102 a share but now trades at a scant $54. Cramer said SAP (SAP) should consider taking over Tableau. He also suggested Oracle (ORCL) may want to pick up Conquer Technology (CNQR), which has fallen from $130 to the low-$80's.

Indeed, even the charts are looking better for these stocks, Cramer continued, as many now exhibit the bullish reverse head-and-shoulders formation. Also pulling in momentum's favor is the lack of new initial public offerings diluting the markets.

Add all of these factors together and its easy to see why the short-sellers are getting nervous. Cramer said he expects the market's bounce to continue Tuesday, which would be a great time to take profits and trim positions as investors prepare for the market's next move.

The Case for Hillshire Brands

With Hillshire Brands (HSH) making a bid for Pinnacle Foods (PF) last week, is it still worth owning Hillshire? One analyst says yes but another says no, leaving Cramer to weigh in.

Cramer noted that the bull case for the $6.6 billion deal to acquire Pinnacle cites the additional $2.5 billion in sales Hillshire will be receiving, giving the combined company more shelf space and more clout with retailers. Add that to the co-branding opportunities, the synergies and the fact the deal is additive to earnings and it's easy to see why some analysts are cheering the deal.

But on the bear side, analysts noted Hillshire once had a rock-solid balance sheet with lots of cash but now not so much. Hillshire itself was thought to be a takeover target but those hopes have dwindled with the Pinnacle acquisition. Also, analysts were not impressed with the combined company, which will have many brands but most of them in low-growth categories.

Cramer said while he's siding with the bulls in this deal and likes the new Hillshire, there are better opportunities out there. He once again recommended B&G Foods (BGS), with its 4.2% yield, as one such opportunity and Whitewave Foods (WWAV), with its organic milk and non-dairy alternatives, as another.

Turnaround Possibilities

Stocks may trade as commodities in today's market thanks to sector-based exchange-traded funds and futures, Cramer told viewers, but that doesn't mean a company's actions don't matter, especially when that company is in the middle of a successful turnaround. That's certainly the case with two such turnarounds, Rite-Aid (RAD) and J.C. Penney (JCP).

After alienating its customer base and losing nearly two-thirds of its value, many wondered whether J.C. Penney could survive 13 months ago. Yet, its new CEO pulled off the impossible, Cramer continued, and its share price proves it. After falling to a mere $5 a share, Penney can now be had for over $9 a share, and Cramer said that's just the beginning.

Cramer said Penney could be following in the footsteps of another spectacular turnaround, Rite-Aid. This stock traded for less than $1 some 18 months ago but has now seen a 453% gain over the past two years thanks to its remodeled stores with a wellness focus.

While Rite-Aid may be in the ninth inning of its turnaround, Cramer said Penney is only just getting started, which is why he thinks the stock will outperform its sector handily over the next few quarters.

Executive Decision: Chip Johnson

For his "Executive Decision" segment, Cramer spoke with Chip Johnson, president and CEO of Carrizo Oil & Gas (CRZO), the shale oil and gas producer that just posted a seven-cents-a-share earnings beat on a 27% rise in revenue. Shares of Carrizo are up 54% since Cramer got behind the company in September.

Johnson said Carrizo has been able to grow while strengthening its balance sheet thanks to the sale of some less assets and moved the proceeds to its high-growth areas.

Johnson had many positive things to say about the company's wells in the Utica shale, saying its condensate wells in the region have been excellent and will be fetching great prices for their output.

Carrizo is also performing well in its other hot areas, including the Niobrara in Colorado, but Johnson is most fond of the Eagle Ford shale in Texas, a field he characterized as the best he's ever working on, thanks to its solid output and ideal logistics.

Cramer said he's been a fan of Carrizo for a long time, and that's not changing anytime soon.

Lightning Round

In the Lightning Round, Cramer was bullish on Schlumberger (SLB), Chevron (CVX), Emerge Energy Services (EMES) and MasterCard (MA).

Cramer was bearish on Twitter (TWTR), Hornbeck Offshore Services (HOS), ConocoPhillips (COP), Synovus Financial (SNV) and Visa (V).

No Huddle Offense

In his "No Huddle Offense" segment, Cramer wondered why so many investors are going "gaga" over AT&T's (T) bid for DirecTV (DTV) for $48.5 billion.

Cramer said DirecTV's technology is an also-ran, given our new broadband world. The company's only worthy asset is its exclusive deal with the National Football League for its "Sunday Ticket" package. But that deal expires at the end of this season, Cramer noted -- without it, DirecTV has nothing.

If DirecTV were truly valuable, other companies would be bidding for it, Cramer continued. So far, no one has stepped up. DirecTV does have growth in Latin America but that's been a historically difficult place to do business, said Cramer.

With the NFL now having AT&T over a barrel, Cramer said he doesn't expect the re-negotiations to go well. That's why he's still scratching his head on why AT&T made the deal in the first place.

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 no position in stocks mentioned.

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