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NEW YORK (TheStreet) -- With interest rates low and good growth hard to come by, it's no wonder CEOs are looking towards mergers and acquisitions to turbocharge their stocks, Jim Cramer told Mad Money viewers Monday. By the looks of things, not only are we in the early innings of this trend, we might not've even thrown out the first pitch yet.
If there's one simple truth in the markets right now, it's that we've got too many of just about everything. In the case of retail, we've got too many stores, which is why it makes perfect sense for Asena Retail Group (ASNA) to make a bid for Ann (ANN), news that sent Ann shares up 19%. Asena can easily close underperforming locations and save over $150 million a year in the process.
We also have too many biotechs, which spurred Endo International (ENDP) to snap up the privately-held Par Pharmaceuticals in another deal that makes perfect sense. Will this deal rally other biotechs to follow suit? Probably so.
In the semiconductor sector, you guessed it, too many players. That's why the news that Intel (INTC) may be in talks to buy Altera (ALTR) sent those shares up 5.6%. After the deal that created Qorvo (QRVO), its clear that merging is the way to grow.
This trend plays out in industry after industry, from travel Web sites to food companies to the banks. Why compete with your rivals when you can just merge?
Executive Decision: David Jaffe
For his "Executive Decision" segment, Cramer sat down with David Jaffe, president and CEO of Ascena Retail Group, to learn more about its acquisition of Ann and the overall state of apparel retail.
Jaffe said that by acquiring Ann his company will be able to leverage its infrastructure to produce over $150 million a year in synergies. He said transportation in particular can be streamlined as all their stores, which include Lane Bryant, Maurice's, Catherine's and Justice, can be combined with Ann Taylor's stores and fed from the same distribution centers.
When asked about the customer bases, Jaffe said their research indicates that there is very little overlap between Ascena's brands and Ann's.
Turning to the issue of the fickle fashion industry, Jaffe explained that spending has been shifting away from apparel for a few years now, migrating to the home and home furnishings, along with technology and experiences like restaurants and theme parks. However, in recent months he's noticed that fashion items, when properly executed, seem to be coming back. This is why Ascena, now with Ann, will be ready when the pendulum swings back to fashion.
Cramer remains a big fan of Ascena.
A Tale of Two Burger Joints
How can two burger joints both post great earnings but the stock of one rocket higher while the other gets slammed mercilessly? Cramer dove into the earnings of Shake Shack (SHAK) and Jack in the Box (JACK) to find out what's really going on.
Shake Shack has officially become a cult stock, Cramer explained. People eat there, love the food then buy the stock no matter what the price. When the company reported, it did indeed have terrific same-store sales and a clear runway to expand from a regional to national franchise. But what Wall Street really got excited about was the fact that Shake Shack was profitable, unexpected news that blindsided the short sellers.
In the case of Jack in the Box, however, the company delivered what it always delivers -- terrific results. There was no excitement, no surprise. Not even the company's 50% increase in its dividend nor its stock buyback was enough to buoy shares into the green.
The market doesn't reward "A" students for continuing to get "A's," it rewards "C" students for coming home with an unexpected "A-," and that's exactly what Shake Shack had on its report card this semester.
Cramer was bullish on both stocks, however, and would own either for the long term.
Executive Decision: Howard Schultz
In his second "Executive Decision" segment, Cramer spoke with Howard Schultz, CEO of Starbucks (SBUX), an Action Alerts PLUS holding, to learn more about that company's new partnership with the streaming music service Spotify.
Schultz explained that Spotify is the leading company in the streaming music category and is offering a custom experience that will bring the ability to listen to Starbucks playlists outside of Starbucks locations using the Starbucks mobile app.
Additionally, Spotify will be the premier partner in Starbucks' new "stars as currency" program, which will extend Starbucks' highly successful rewards program to other "likeminded" brands.
Schultz did not comment on which companies might be next to join the program, but noted that over the next few months, Starbucks' customers will see rewards appearing in other locations. Stars will become a new revenue stream for Starbucks.
In the Lightning Round, Cramer was bullish on EOG Resources (EOG), Brunswick (BC), Urban Outfitters (URBN), GasLog (GLOG), SPDR Gold Shares (GLD), Randgold Resources (GOLD), Realty Income (O) and Manitowoc (MTW).
Executive Decision: Eric Affeldt
Affeldt said ClubCorp is reinventing country club management by purchasing under-managed clubs and providing capital for needed improvements and professional managements.
Country clubs are a lot more than just golf, Affeldt explained. The company derives about 46% of its revenue from membership dues. ClubCorp's new "ONE" membership program affords members an "optimal network experience" by granting access to any one of 89 participating clubs around the country.
Cramer said ClubCorp offers investors both growth and a good yield.
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