Jim Cramer's 'Mad Money' Recap: Thank You, Corporate America

 

 

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NEW YORK ( TheStreet) -- With the S&P 500 hitting new records again today, Jim Cramer told his Mad Money viewers Monday they shouldn't be thanking the Federal Reserve, they should be thanking individual corporate CEOs.

Cramer said the market's skeptics still feel the current powerful rally is undeserved, being spurred only by the Fed's cheap money policies. But that's totally false, he said. It's corporate profits that are fueling ever higher stock prices, and that growth is only accelerating.

Corporate America is administering a big dose of self-help, Cramer told viewers, as they're not only doing more with fewer workers and more technology, they're also buying up the competition.

That's why a stock like InterMune (ITMN) was able to rally 35% in a single day after receiving a takeover bid and why both Tim Hortons (THI) and Burger King (BKW) were able to rally 19% after their merger was announced. These deals are all about accelerating growth, Cramer explained.

In today's economy we have too much of everything, Cramer continued, and that means too much competition and lower margins. That's why in industry after industry, from airlines and biotech to restaurants and technology, the wave of consolidation continues.

So as the markets hit record highs, don't thank the Fed, Cramer concluded, thank CEOs for taking control of their own destinies and working hard for you, the shareholders.

Executive Decision: Cheryl Bachelder

For his "Executive Decision" segment, Cramer spoke with Cheryl Bachelder, CEO of Popeye's Louisiana Kitchen (PLKI) , a stock that's up 357% over the past five years but has been struggling of late with the broader restaurant sector.

Bachelder said her company is doing exactly what it needs to do -- building the Popeye's footprint both here in the U.S. and around the world. She noted that Popeye's could double its size in the U.S. alone, then take advantage of many opportunities overseas. Over time, Bachelder said, the markets will recognize the company's solid, consistent performance.

Bachelder also commented on her company's decision to buy back all their recipes. She explained the company's founder retained those recipes and Popeye's was paying a $3 million annual royalty to use them. Now those belong to Popeye's and are secure for perpetuity.

When asked about the stock buyback program, Bachelder said her first priority is organic growth. After that, the company's stock buyback program is also a priority, which is why it plans to buy back $20 million to $30 million worth of Popeye's stock this year.

Cramer said it's not too often investors get a discount on a quality restaurant stock but they're getting one now.

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