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NEW YORK ( TheStreet) -- Never in four decades of investing has Jim Cramer seen the markets so focused on a single IPO, he said on Mad Money Thursday. At $68 a share, Cramer said he's a buyer of Alibaba, which will trade under the ticker "BABA" starting Friday.
Toall the skeptics, Cramer offered up his answers to the top 10 worries about Alibaba.
1. Valuation. Cramer said even at $80 Alibaba still has a price earnings multiple of 32, which is cheaper than Facebook (FB) and Twitter (TWTR) , two stocks Cramer owns for his charitable trust Action Alerts PLUS.
2. Ownership. Cramer said that some charge Alibaba's ownership structure is too complicated but does it really matter?
4. CEO Jack Ma. Again Cramer asked, so what? Many companies have dual classes of stock, including Google (GOOGL) , another Action Alerts PLUS name.
5. Valuation (again). Cramer said the size of Alibaba's deal doesn't matter, all that matters are its earnings, growth and gross margins.
6. Alipay. Cramer said Alibaba's ties to Alipay are indeed a risk, although he views it as a small one.
7. Insider selling. Cramer said he's also not worried about insider selling on the deal. If anything, the market needs more shares of Alibaba.
8. Dot-com Bubble, take two. Cramer said Alibaba is not the top of the market. Back in 2001, companies coming public were not profitable. Alibaba is extremely profitable.
9. Chinese ecommerce. Cramer said fears of an ecommerce slowdown are more than offset by the 50% of China that's not even online yet.
10. Chinese economy. Yes, the Chinese economy may be slowing, but Alibaba is also a wholesaler to the rest of the world, mitigating those risks.
Cramer said his bottom line is he's a buyer of Alibaba up to $80 a share given its valuation, growth rate and its excellent gross margins.
What's Wrong With Rite Aid and Sears?
Shares of Rite Aid fell another 18% today after the company once again lowered its estimates amid dwindling pharmacy reimbursements. Cramer said Rite Aid has made a series of breathtaking missteps but he's not willing to throw in the towel just yet. He said that a turn could still be coming at the drugstore chain, it's just going to take longer than we expected.
But then there's Sears, a company that loses $10 a share in value every year it continues to operate. Cramer said he now agrees with the most recent analyst report calling for the company's liquidation. Sears, he said, is a goner.
Hungry for Darden
Is Darden Restaurants (DRI) poised for a comeback? Cramer thinks it is.
Darden used to be a best of breed operator, Cramer explained, but recently sales have been lagging along with the company's shares, down 7% for the year. But thanks to an activist investor and the sale of Red Lobster, a turn may indeed be at hand.
Cramer said Darden's pick to replace its outgoing CEO will be an improvement, an improvement made even better by a new executive compensation plan that's tied to the most important restaurant metric of same-store sales.
In addition to the company's new focus on results, Darden is also beginning a huge remodeling effort at Olive Garden, with 40% of stores expected to be completed by 2017. So far, with only three stores completed, traffic is by up 10% at those locations.
Cramer said investors need to get in now, ahead of the move, if they expect to profit from the turnaround. One analyst has already upgraded Darden, going from underperform to outperform in a single day. More upgrades are likely soon.
Executive Decision: Andy Mattes
For his "Executive Decision" segment, Cramer sat down with Andy Mattes, president and CEO of Diebold (DBD) , who took over the post in June of last year. Shares of Diebold currently yield 3%.
Mattes talked about innovation in one of Diebold's core businesses, ATM machines. He said the newest generation of machines no longer rely on PIN numbers and can instead be accessed securely via a customer's cell phone, either using Apple's (AAPL) new ApplePay system or others like it.
Meanwhile, in emerging markets such as India, Diebold has developed ATM machines that can run on batteries and recharge via solar panels, helping to bring financial services to the most rural of areas.
Diebold also helps banks reinvent their branches by helping to design, build and operate more automated transactions in smaller footprints.
When asked about the company's turnaround, Mattes said Diebold is still in the early stages of taking out costs, streamlining operations and focusing on innovation and sales. That's why Cramer called Diebold an exciting story with a great yield to boot.
Executive Decision: Roe Patterson
In his second "Executive Decision" segment, Cramer sat down with Roe Patterson, president and CEO of Basic Energy Services (BAS) , one of the many companies helping to fuel America's oil and natural gas revolution.
Patterson said his company put up good numbers this quarter, even with some segments of the business being very competitive in nature. He said Basic Energy competes with the bigger companies including Schlumberger (SLB) and Halliburton (HAL) .
When asked whether the U.S. does indeed have more oil and gas than thought, Patterson said he thinks so. In many cases, he said the company always known the oil was there but now new drilling techniques has made getting those resources practical.
Turning to the issue of energy self-sufficiency, Patterson thinks North American energy independence is possible in our lifetimes given the new reserves that are being found.
Cramer said he's a fan of Basic Energy Services.
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-- Written by Scott Rutt in Washington, D.C.
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