Jim Cramer's 'Mad Money' Recap: Merger Monday Has Returned

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NEW YORK ( TheStreet) -- Merger Monday is back, Jim Cramer told his Mad Money viewers, highlighting just two of the many deals that caught his eye as win-wins for shareholders.

Cramer said LabCorp's (LH) bid for the drug testing and research company Covance (CVD) will likely reignite consolidation in the health care and drug sectors. Shares of Covalence were up over 25% on the news.

Then there was the acquisition of Sapient (SAPE) by the French-based Publicis, news that sent those shares skyrocketing 42% on the day. Cramer said this deal will force the markets to take a look at the entire social media marketing space, deeming the entire group as undervalued.

Cramer reiterated his buy recommendations on both Facebook (FB) and Google (GOOGL) , two stocks he owns for his charitable trust, Action Alerts PLUS. He also reiterated that Twitter (TWTR) , a third Action Alerts PLUS name, needs to get its act together, and quick.

In the end, Cramer said all of the social media names are helping companies deal with the explosion of content that's now being generated every day by consumers. He said SapientNitro, just one of Sapient's offerings, was likely the real target of Publicis and likely won't be the last in this space.

Executive Decision: David Steiner

For his "Executive Decision" segment, Cramer spoke with David Steiner, president and CEO of Waste Management (WM) , which just posted a 4-cents-a-share earnings beat. Shares of Waste Management sport a 3.1% dividend and are up 7% since Cramer last checked in back in July.

Steiner said his company's performance today stems from a full 10 years of work to build a management team that can get the job done. Investors are now seeing the fruits of that labor. Waste Management is not trying to build an empire but shareholder value, which the company aims to do every quarter.

When asked about the pricing strategy, Steiner explained that when you lower trash prices, people don't generate more trash, so there really isn't an incentive to be the lowest-cost provider. He said it's much better to set prices based on inflation and go from there.

Turning to the economy, Steiner said we haven't seen a housing-led recovery so far, which means many of the commercial projects that are typically built to support new communities just haven't begun to ramp up just yet. He does expect a stronger 2015 and 2016 however.

Finally, when asked about falling oil prices and how that affects his company's fleet of natural gas-powered vehicles, Steiner said the economics still favor natural gas and that's what customers expect, so the company plans on continuing in that direction.

Cramer said that Waste Management continues to have consistent gains, a good yield and should have a good year in 2015.

Buy BABA?

With shares of the red-hot Chinese ecommerce giant Alibaba (BABA) running up hard going into tomorrow's earnings release, is now the time to jump in or head for the exits?

Cramer said he believes the estimates for Alibaba are too low and the company will likely beat the current estimates and raise estimates for the "out years" of 2015 and beyond.

How high could Alibaba's shares go? With the company likely to earn $2.78 a share in 2015 and $3.60 in 2016, Cramer said fund managers could pay up to twice the growth rate, or $222 a share, double its current level.

Using more conservative estimates, Cramer said investors might be willing to value Alibaba alongside Facebook, which would give shares a price tag of $160 using 2016 estimates.

Given that Alibaba is the dominant player in the rapidly growing Chinese market, Cramer thinks investors will give the stock the highest multiple they can, which explains why shares are heading up even before we know what the company will have to say tomorrow.

Executive Decision: Robert Abernathy

In his second "Executive Decision" segment, Cramer also sat down with Robert Abernathy, chairman and CEO of Halyard Health (HYH) , which kicked off its first day of trading today after being spun off from Kimberly-Clark (KMB) . The new Halyard is a maker of surgical and infection prevention supplies.

Abernathy explained that as an independent company, Halyard is now able to spend more on research and innovation and can better utilize its cash. He said his company will likely spend its first year completing the separation from Kimberly. Beginning with year two, it will begin looking for strategic acquisitions to grow the business.

Abernathy commented on Halyard's infection prevention products, saying he's seen an uptick of calls from hospitals asking about its products. He also noted Halyard is ready to ramp up production if any major infectious disease outbreak were to occur.

Lastly, Abernathy spoke about Halyard's pain management business, which aims to help speed recovery of patients and help them have less pain.

Cramer said shares of Halyard will be under pressure from sellers in the short term, but over the longer term the company tells a great story.

Lightning Round

In the Lightning Round, Cramer was bullish on Omega Healthcare (OHI) , Ventas (VTR) , FEI Company (FEIC) , Aramark (ARMK) , Kinder Morgan (KMI) , Cisco Systems (CSCO) and Celgene (CELG) .

Cramer was bearish on Sysco (SYY) , Linn Energy (LINE) and 8x8 (EGHT) .

Off the Tape

In his "Off The Tape" segment, Cramer sat down with Kevin Klock, president and CEO of the privately held Talking Rain Beverage Company, whose Sparkling Ice line of beverages has become a nationwide sensation.

Klock said that while Sparkling Ice is only now hitting store shelves across the nation, the company has actually been around since 1992, evolving slowly over time, culminating in a total brand refresh in 2010 that began to resonate with consumers.

Klock continued that consumers are tired of the same old colas and prefer new flavors. Sparkling Ice seems to fit exactly what they're craving, he said, from its flavors and colors to its organic ingredients and brand message.

One of Talking Rain's biggest supporters has been 2014 National Basketball Association Most Valuable Player Kevin Durant, an endorsement that happened because Durant contacted the company and told it he loves the product and has been selling it at his restaurants.

Cramer said Talking Rain has been a huge hit and he wishes the company was public.

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 FB, GOOGL, KMI and TWTR.

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