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NEW YORK (TheStreet) -- It's nice to see the flow of money has reversed from last week's relentless selloff, Jim Cramer told his Mad Money viewers Monday. In fact, there were two reasons the markets were able to rally -- a positive news flow and money managers looking to add more stocks to their portfolios.
There were a number of positive headlines driving the markets, including a wave of mergers in the biotech sectors. Horizon Pharmaceuticals (HZNP - Get Report) was one notable deal and its stock up a quick 18%. Teva Pharmaceuticals (TEVA - Get Report) was also up on the day, as was Catamaran (CTRX), up 27%.
There were also several positive research reports helping to vault stocks higher. An upgrade of Analog Devices (ADI - Get Report) made Cramer re-recommend Skyworks Solutions (SWKS - Get Report), while upgrades of Restoration Hardware (RH - Get Report) and Nike (NKE - Get Report) also caught his eye.
In addition to all this positive stock news, it's also apparent that mutual funds are once again buying after last week's exodus. Funds are calmly looking for more exposure to stocks now that this most challenging quarter is coming to an end.
Buy, Buy, Buy Harris
Harris is already a strong defense contractor providing secure radio frequency communications and encryption systems for government and military use. By adding Excelis to the mix, the combined company will also be able to offer night vision and radar reconnaissance products, all while saving an estimated $120 million a year.
Shares of Excelis are up 57% since Cramer first recommended them in November 2013, and he sees no reason to change his view now. The new Harris will have tons of room to grow overseas and currently trades at just 15 times earnings, as discount to its peers.
The new Harris also brings a solid management team that will easily be able to transform the combined company into a top 10 defense contractor, sending shares much higher.
LULU Is Back
Viewers may remember back in 2013 when Cramer was a huge fan of this turbo-charged retailer. But after a series of missteps Cramer quickly changed his tune because shares slid from their highs near $81 in 2013 to just $37 by 2014.
But today, Lulu is back on track, enough that Cramer owns shares for his charitable trust, Action Alerts PLUS. The stock is up 16% so far in 2015, thanks to its most recent 5-cents-a-share earnings beat with an 8% rise in same-store sales.
Cramer said $80 a share is not out of reach for Lulu because there is a lack of quality growth retailers for money managers to choose from. The company's strong quarter could've been even stronger without the West Coast port strike and it's easy to see how the company could raise its forecasts later in the year, he added.
Off the Tape
In his "Off The Tape" segment, Cramer spoke with Ali Partovi, an angel investor and serial entrepreneur who recently gave a TED talk on move towards natural and organic foods.
Partovi said that organic foods are only more expensive than industrially produced alternatives because of the supply and demand mismatch. For decades, our government has been encouraging farmers to plant corn and soy and penalizing them if they plant fruits or vegetables. Thus supply is not keeping up with demand.
It's actually cheaper to produce organic foods, Partovi continued. Farmers save on fertilizers and chemicals. It's hard to make the transition to organic, however, because it takes up to three years to certify a field as organic.
Partovi commended McDonald's (MCD) for its recent decision to offer antibiotic-free chicken. He said big players like McDonald's have the power to help move the needle and raise awareness for healthier eating.
In the Lightning Round, Cramer was bullish on Fiat Chrysler (FCAU - Get Report), Dominion Resources (D - Get Report), Consolidated Edison (ED - Get Report), American Electric Power (AEP - Get Report) and Alcoa (AA - Get Report).
No Huddle Offense
In his "No Huddle Offense" segment, Cramer responded to a tweet he received on Twitter, asking where he would invest new money in the market. Cramer said this type of question simply doesn't lend itself to a 140-character answer.
Among the several areas asked about in the tweet, Cramer said the cult stocks like Tesla Motors (TSLA - Get Report), Amazon.com (AMZN - Get Report) and Netflix (NFLX - Get Report) are all intriguing, but he prefers stocks with traditional valuations.
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