my friends from california, brian and christina. >> and friends from cincinnati, we dragged them in here. >> tomorrow, etiquette for the whole family. >> and ryan scott. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to save you some money. my jobsn't just to entertain but to educate and teach you. call me at 1-800-743-cnbc. or tweet me @jimcramer. can stocks be undervalued even when the market appears to be overvalued? well, we have had a monster bull

second week of february. it's been pretty much unstoppable today. no different. dow gaining 22. s&p up. the nasdaq up 2.8%. there are reasons why the market moved up. you hear them all the time. the fed on hold, the dollar weaker, stress in the oil patch let up with oil going up to $40 perhaps saving billions in loans from going bad. all the positives do is allow the market to reveal what it really is. that's an amalgam of thousands of stocks of companies with different prospects and valuations. i think that a lot of the big move has to do with the fortunes of individual companies and how many, many stocks may be worth more than where they are currently in value. take this incredible tussle over starwood. this thing is amazing. that's the hotel chain with 1300 properties all over the globe we liked a few months ago marriott

a bid so low i was astonished the company would sell for so little. the board was under pressure from activists in a strong position to demand a sale. they owned a lot of stock but the hotels had disappointing valuations ever since the advent of air bnb. i love that but it's probably worth more now than starwood and marriott combined. there are so few new hotels being built is absurd and the people of air bnb have to consider buying hotels since they are so cheap. i only mean that somewhat if a teeshsly. at the 11th hour a chair of the chinese communist party figured out marriott was buying the property so deeply because the demands of the activists were such a quick sale they swooped

old bid by as much as $2 billion. this morning marriott had a $13.6 billion offer. now we are talking about a deal worth a whopping $2.6 billion more than marriott's own first offer. hallelujah you would think if marriott were over paying the stock one hammered but it's barely down. that means starwood never should have been so low, that the stock the communists saw it aided by the fact that starwood's board made it easy for another company to come up with a higher bid. last week on "squawk on the street" we interviewed herb and he said it was never so lucrative, costs so low yet the stocks are being given away as they are selling 33 to 50% less than the average stock on the

they are in a bear market. the airline stocks have been able to move but there were so many times the business was horrendous and all the companies except southwest were losing money. [ house of pain ] now the stocks are trading as if the whole she-bang were about to collapse. when that's at least to herb pretty impossible to envision. i have heard talk in the past about how the industry didn't have its act together. happening at the same time valuations are the lowest he can recall. communist government to buy american airlines but if someone were going to launch a bid in an industry that would never allow more consolidation, the stock would deserve to be quite high. higher. let's take caterpillar. this is controversial. the company produced numbers far below what wall street was expecting though they didn't put

while cat kept the yearly earnings forecast intact the announcement made it clear the businesses were running well below the plan. after initial decline that morning before stock trading it took off and is up 42 cents today. you can see it's technical because so many people were short it there was no way it could go down. what if we say cat never should have been as low as it was. while the weakness quantified the dividend wasn't in jeopardy and the country is realistic about what it's doing which merits a higher price. that's not just caterpillar. cummins, another huge engine company saw the stock go from 85 to 110 in a straight line. big funds were under invested in cyclicals. i get it. but the stock got too cheap. then the paint company valspar. it was disappointing last quarter. people slashed the numbers and the stock dropped.

they bought it this weekend. they didn't buy it for the quarter. the idea that the company's existing stock price was too low given the opportunity to present it is so obvious given the premium that valspar is going for after the sherwin-williams the rights make what were improperly valued by the market. company's earn ing stream is bigger over the long term than the market was willing to value. does that mean valspar stock should have been higher? yes. definitely. huge premium. says a great deal about how wrongly valued it was coming into today. how about the media companies? not long ago the market determined that cord cutting and expensive programming -- okay? are two head wind it is company couldn't recover from.

espn to that company and the stock plummeted from 120 to 89 in three months time. disney rebounded back to 100 dollars last week. we heard the death knell of time warner when it was at 60. now at 72. cbs. did they get hit by the possible sale of cbs radio or should the stocks never have been as low as they were to begin with? you know how i feel . finally. let me give you two of the best performers. walmart and mcdonald's. walmart stock was at 66 but announced a giant short fall trading down $10. it was a shattering move for a stock that doesn't trade in a wild fashion. now it's at $68. two bucks above where walmart announce add short fall and mcdonald's was in the low 90s when it got a new ceo. a couple of good quarters. maybe neither stock deserved to

why isn't it clear to people? it gets obscured by the bigger backdrop of the fed and the presidential race and weakness in the rest of the world. at any given time we had a rolling bear market in so many sectors. the drug companies have been whipping boys of the presidential election. they have been in a bear market. perhaps it ended with a change of management and value which was a total clown show of a company. where's the government? or maybe it's just -- my bottom line is clear. you see the individual companies for what they are worth. right now so many are worth more than a what they are currently selling for. i think it is not done. he'll see more deals and higher. let's go to ab dee in california, please. andy. >> caller: boo-yah, jim. how you doing? >> doing well. how about you? >> caller: well, thank you. i'm curious in the current

with the likelihood of only one more interest rate hike is it still worthwhile for me to own bank of america and jpmorgan? >> all right. this is a hard question. my charitable trust at action owners plus.com. we are doing a seminar this week, makes me feel that we are too long them. we own bank of america and wells fargo. maybe i wish we only owned one. bank of america is disappointing. i think wells fargo has done much better but it is an expensive stock. the answer is the less bank exposure the better, frankly. the fed may only raise one. i think when the actual quarter disappointing to people. joey in florida. joey. >> boo-yah, mr. cramer. >> boo-yah. >> caller: so stock down 30% in the last year and now mckesson what are you thoughts on the

are being crushed here. it's being shot at by everybody. i liked cardinal, amerisource. i walked away. i feel the government doesn't like these companies. i feel like they are all trying to do a good job but shooting each other. too difficult. too much of a battleground. i avoid battlegrounds. phil in new jersey, phil. >> caller: boo-yah, jim. how are you, my friend? >> doing well. how about you? >> caller: doing well. i'm glad we have a person in philly that loves villanova. it's hard to come by winners in our city. >> he handles himself so well. he's the coach of nova and it's a great school. we did a fabulous show there in 2013. go ahead. >> caller: absolutely. you have a great staff. >> indeed.

we had things a few weeks ago and you said it will sell. >> right. >> caller: since then the stock is down 14%. now the stock has been skyrocketing and i wonder if i should buy it back. >> you raise a great point. remember when i said i wanted you out because of accounting irregularities and i said there were times i could miss a move? i missed the upside in boeing. i feel bad, but i have been recommending both honeywell and alcoa as plays on the air space cycle and honeywell has done well. i think it can go higher. when the smoke clears you see companies for what they are worth. plenty are under valued. tonight on "mad" are you stuck on the brand behind band aids? and add to the weekend games your bracket might be busted but the portfolio doesn't have to

could investigate. yesterday was the first day of spring. time for homework before we go out and play. i'll share with you the stocks that i'm studying just ahead. so stick with cramer! >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. someone's hacked all our technology. technology... say, have you seen all the amazing technology in geico's mobile app? mobile app?

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right now nearly every company in the pharmaceutical sector is caught up in a nasty bear market with one big exception, johnson & johnson. while the drug index is down an astounding 9% year to date jnj has rallied up more than 4% for 2016 outperforming its pierce and the s&p 500 which is roughly flat over the same period. right now jnj is just a buck over -- from just a buck from its 52-week high. wow. wish i could say that for the

what makes it more stunning is for johnson & johnson, years and years it was among the worst lagging in the industry. now it's transformed from the ugly step sister of pharma to the belle of the ball. seemingly overnight. what allowed them to outperform while the sector gets bogged down by worrying about what hillary clinton or donald trump will do to drug pricing? the rebound seems sudden by johnson & johnson is a come back spear headed by the ceo. the difference here is all about ceo leadership. versus, say, value. given that he took over four years ago you might wonder what's taking so long. when he came in april of 2012 it was a truly troubled company thanks to the mismanagement of the predecessor. it's taken time to get his house in order but all three of the

medical devices and consumer products are in better shape. particularly pharma which may have the best pipeline in the industry. consider when he took over in 2012 he had to clean up a mess at the consumer business. under the leadership of his predesessor, the fda sanctioned johnson & johnson not once but repeatedly in the over-the-counter drug business forcing him to recall more than 135 million bottles of tylenol and other over-the-counter drugs. as a result of the recall jnj signed an agreement with the fda that put three plants under tight regulatory scrutiny and shut down the huge facility in fort washington, pennsylvania. all together jnj over-the-counter sales declined in 2009 to 2012. gorsky fixed the problems and the fda allowed them to restart production at fort washington in

where i grew up. this business includes motrin, sudafed and other products. they were sanctioned so heavily and repeatedly by the fda. in terms of their problems that was the tip of the iceberg. j&j has a hepatitis c franchise that's just been crushed by koch technician from gilead that cures he p-c. sales fell last year. fell behind as implants went from up 34% in to 12 to sales shrinking by 4.3% last year thanks to increased competition

weaker. somehow jnj hasn't seemed to skip a beat. despite the issues gor zs sky created a company with the fastest growing drug business among big pharma and perhaps the because he's confronted problems with a military discipline you would expect from a west point the army. two months ago he announced a order to boost profitability. it was tough medicine. roughly 3,000 workers. this is jnj in an initiative that should produce 1 million in cost cuts. ever since then the stock has been a rocket ship. johnson & johnson is an established drug business. they hadn't got much credit consumer medical device divisions. investors can focus on everything the business has going for it and it has a lot. not only do they have 11 drugs with over a billion dollars in sales and i love that mosaic including three huge arthritis drugs, remicaid, solarum and symponium.

risk of blood clots and a drug for chronic leukemia and other indications n. the late stage pipeline built here is glorious. he has a good tie-up with google, too. well, al a if a bet. two phase three drugs are up this year. psoriasis and another arthritis drug. and a prostate cancer drug. they have a partnership with viocyte where they are trying to treat diabetes with stem cells. it could be a game changer. maybe they have ab intuitive search killer down the road. and so many pharma companies, he companies. they spent almost nothing. they can acquire whatever they want as the stock prices keep coming down. jnj is in the cat bird seat

financial discipline. i can't emphasize enough how great the balance sheet is. jnj has 18 billion net cash and they are only one of three public companies in the u.s. with a aaa-rated balance sheet. they are the polar opposite of a dog like valiant with there's 30 billion in debt. jnj while the dividend yield is only 8% they have a history of raising the pay out. if you believe as i do that the super freaking strong dollar peaked and could be headed lower, jnj is one of the best pharma companies to own. they get about half sales from over seas. the profits will translate into more greenbacks boosting earns. if you want to understand the extent of the turn around they have experienced earning shrinkage in 2012 to terrific earnings growth in the latest quarter, 29%. this is a big company.

rest of the industry. stock still trades at 15.6 earnings estimate. which represents discounts to eli lilly which is not doing as well. or bristol-myers and of course it's cheaper than the average price in the s&p 500 which is silly. bottom line, while the rest of the industry languishes, johnson & johnson is one of the hottest of the group roaring higher thanks to discipline and hard work put in by the ceo. to me it feels like he's finally turned the company around and cleaned up the messes made by his predecessor. something abdicated by the bad old days. there are still calls to unlock value. goldman sachs made one last week. to me gorsky is bringing out so much value that jnj is one of the few pharma companies that i think can with stand this election year. and come out the other side with a stock that's much higher than

there is much more "mad money" ahead. there can only be one winner in basketball's big dance. can the same be said for your portfolio? don't miss my take. this weekend we saw paint consolidation when sherwin williams announced a bid for valspar. i'm cluing you in on the deal. and my homework's due! time to see if you can consider buying these. so stick with cramer. my son and i used to watch the red carpet shows on tv now, i'm walking them. life is unpredictable one thing i need to be predictable is to be flake free. because i have used head and shoulders for 20 years. used regularly, it removes up to 100% of flakes keeping you protected every week, every month, every year you ready ma? always life is unpredictable, so embrace it! head and shoulders. live flake free for life

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15 seeds do beat 2nd seeds. upsets happen. [ applause ] we are surprised but they occur. even as in the end a true underdog almost never wins the ncaa basketball championship. we all accept that when it comes to march madness. every bit is a given. still when middle tennessee stuns michigan state or baylor falls to yale we are as stunned as i hope the nation will be whenville know eva takes it all the way in houston. fairy tales don't often come true. no 16 seed ever beat a 1 and they don't come true in the stock market either. in the end, the market -- it isn't zero sum. many favorites can win because there is no stock in the

i cannot express how thee important this is to investing. i can't get over the cynicism i hear about solid stocks and companies. when they do well it's like, wow, that's yale beating baylor. almost shocking. let's use a march madness teaching moment. just consider the most important quarter that came out. oracle reported an excellent number. saw the stock repel. that's a terrific game for the software company. this company has been transitioning rapidly from what's known as on premise technology to the cloud. the concept of the cloud can elude many of you out there. but think about how there is no amazon store when you walk in to place an order. you walk into your pc and the order goes to the cloud. amazon intercepts and sends it your way. a retail store with a physical

amazon is new tech, the cloud. oracle is a combination. it is a dominant player in the older but lucrative software business but has a fast growing cloud business like so many retailers have. an online strategy. as walmart make as move on the web to challenge amazon oracle is challenging salesforce in the cloud. sales force has a platform to sell more goods, coordinate salespeople and marketing. oracle does that plus research planning. for the moment it has larger envisions. okay. enough. i want you to consider oracle's founder larry ellison as if he were a fabulous winning coach in the ncaa with oracle as a perennial contender. he saw sales force came to develop a new offense and started winning business away from oracle. he brought in mark hurd and had twoco ceos as he was the

it took a couple of years but out ice coming on strong and the growth is amazing. when the company reported last week it had eye-popping numbers that indicated a true acceleration. oracle is changing stripes and changing them quickly and successfully for the most part. enter the march madness analogy. ellison and hurd are competitive. you go through the earnings statements and press release. they take multiple shots at both work day and sales force.com. work day being another cloud competitor to the point if you got caught up you would believe there is a tournament and they would trash talk themselves to houston they are so aggressive particularly against work day they make you think about betting on work day is like betting on middle tennessee.

they get caught up in the game. they make it seem zero sum. some of them without doing much you would expect more from look at the emotional notes about the cloud after linkedin and tableau software imploded with smaller results in the first week of february. to analysts it seemed those upsets predicated a slew of losses by sales force, work day, adobe and oracle for that matter. in short the community didn't believe oracle had what it took to get their ticket punched to the big dance let alone the elite 8.

wrong. this is not about bracketology. it's about business. there is no houston, no sweet 16. there are just good companies and different valuations that make sense or they don't. yes, i will tolerate this. in reality they weren't playing in the tournament. they weren't even cloud stocks to begin with. i think sales force, work day, oracle and adobe and s.a.p., could all be winners. every one of them. to win in individual quarter or year, oracle is at 14 times earnings going into the year which is under dog status versus the historical long term performance because of cloud accounting. you can't see the earnings break out over time and, boy, it is about to break out. oracle was a safer bet to do well. there is no winning.

this could be a stronger quarter there is no tournament. just lots of good companies taking advantage of a powerful secular trend. one of the reasons i'm not surprised at the turn in the stock market since the bottom on february 11. as i said, many businesses are doing well. there was a lack of carve into the market for lower prices to weaker european banks. none of those should have impacted the stocks now. the bottom line conclusion is the sooner you get the sports analogies out of your heads something hedge fund managers are prone to the sooner you realize you can make money not betting against a loser for a winner but rather by just accept ing you aren't betting at all.

do well. want sports? watch march madness. want business? watch the trends, invest in high quality stocks when they are under valued and everybody wins. ben in new york. ben. >> caller: mr. cramer! how are you, sir? >> good. how about you? >> caller: pretty good, man. i have a crazy question for you. it's been on my mind for a while now. meer of the two power houses? some of these aspects are amazing. one would be a direct marketing aspect for one. also getting rid of video on demand stuff. i'm talking about netflix and amazon. amazon has the on demand video stuff. not doing as great as netflix. they have so many interests i feel a merger would crush the competition.

billion. it could certainly do it without a problem. i think netflix isn't for sale. when netflix was much lower, i pleaded with apple to buy netflix. i thought it would give them a stream of revenue. when amazon, i tell you reed hastings wouldn't take a bid. jeff bezos wouldn't make an offer. i think some of the amazon these are separate companies that won't happen. at least in my book. paul in california. >> caller: b-b-boo-yah to you from berkeley. >> i love berkeley. good horse racing there. people don't talk about it. what's up? >> caller: i want to say thank you.

holistic health. t at 5 it represents real value. the market can have multiple winners. listen to the conference call. i'm here to help. much more "mad money" ahead including a study session with all of your stock questions. don't miss this week's homework which we haven't done in ages. and should you -- [ sell, sell, sell ] -- sherwin williams before the valspar deal? don't make a move before my take.

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time to do some spring cleaning and catch up on our homework. when you ask me a question and i don't give you an answer i have to circle back and do some digging which we'll do now. some people say we don't do the homework when we claim we will. tyler called in about tyler technologies. i said i would get back with him. cities, counties, states, school districts. they automate property tax bills and case management. recordkeeping functions. this is a huge total adjustable market but demand as many governments have old or out of date systems. for starters tyler has a long history of growing the acquisitions.

worse than management. they had an earnings miss off 66 cent basis with a hideous one for 2016 well below what people expected. didn't seem like a buy. after the down move tyler technology is expensive if you why not -- why buy one that disappointed. now technologies needs to prove it's gotten its act together. we got a call from mark in indiana about stag industrial. stag owns single tenant industrial properties throughout the united states.

worry it might not be safe. i spent 1.7 billion to acquire industrial buildings. nothing wrong with that but it hit a few snags lately. for starters even with the federal reserve rising interest rates like last year that will make it more expensive to fund purchases. historically stag issued equity to pay for the deals. with a stock currently at a 25% discount to the company's net asset eval, the n.a.v., it doesn't make financial sense to do a secondary. stag said they claim to sell $100 million to $200 million to fund further acquisitions. hard to get excited about a story where they are selling real estate.

the finances here. the dividend seems dicey to me. consider this has so much exposure to the industrials, this stock isn't my cup of tea. if you have to own one, i prefer a better one like bentas or federal realty. stag isn't for me. back on march 14, stonemore partners. i knew this stock but wanted to do more work. lawn caskets, tombstones and insulation of them. in order to valuate it i need you to forget the morbid aspects

yield and its safety. now stonemor has an eye popping 10% yield which is the only reason to own the stock given the company has been unprofitable for ages. they have been taking on more debt in order to finance new acquisitions. they have a ton of debt and it ain't cheap with more than half of the debt in senior notes. the company's free cash flow has been shrinking to the point it went negative in 2015. when you consider they are paying out more than $20 paying out more than $20 million to shareholders that yield looks unsustainable. you need to take it as a red flag warning that the distribution could be cut. in the case of stone mor there are way to many for me to say anything other than -- yes, sell, sell, sell. thanks for the questions. "mad money" will be back.

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it is time. it is time for the lightning round. you say the name of the stock. i don't know the calls or the name of the stock ahead of time. sell. [ buzzer ] -- then the lightning round is over. are you ready, skee-daddy? time for the lightning round on cramer's "mad money." start with steven in new york. steven. i'm a long time holder of time warner cable. twc. recommended it because of the merger. he said it would keep going higher. a terrific off the chart segment a couple of weeks ago. that's been dead right.

chuck. >> hi. i'm from sad golden state warrior area. i want to know about bristol-myers. >> i'll tell you. bristol-myers looks like the spurs who are unbelievably good. i'm a buyer of bristol-myers. i love the stock. amelia in florida. >> caller: hey, jim. happy belated 11th anniversary. >> thank you. we are proud of it here, still talking about it. what's happening? >> caller: i participated in your anniversary show and i'm still -- >> i remember that. what's up? >> caller: simply amazing. thank you for all you do. >> thank you. >> caller: my stock -- semantic. >> i saw it was upgraded and i'm a palo alto guy. i know they are not similar. and a fort net and a cyber arc guy all over symantec. jim in california. >> caller: hey, mr. cramer. this is jim from huntington

thanks for taking my call. >> of course, sir. >> caller: i have had a lot of eggs in mcgraw hill and i need to diversify. waiting for it to get to the 52-week high. >> i think you should take a little off the table. it's a winner. hasn't been a lot of that issuance of late. not bad. i like to book a little profit there. gray in california. gray. >> caller: hi, jim. my stock is goldman sachs. >> goldman sachs was up big last week. i don't expect a big quarter. never bet against goldman sachs. that makes sense to me. dave in illinois. dave. >> caller: dr. cramer, happy 11th, my good man. >> thank you, sir. >> caller: number 151 in your biotech bible, bob ward and i like radius health. rdus.

it is down so low, i would -- [ buy, buy, buy ] >> that's the conclusion of the lightning round! >> announcer: the lightning round is sponsored by td ameritrade. geico motorcycle, great rates for great rides. dove men+care. the strength test. like leather, skin is stronger when it's hydrated. that's why dove men+care bodywash has a unique hydrating

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all weekend i obsessed about two things. first whether villanova would beat iowa and if there was enough good news to stay positive on the stock market. i was pressing my luck after a huge long run friday. after i got back from watching nova get its ticket punched to

sobering. how we have been over wougt for ages and i feel greedy. i opened my window to the web to the sights i watch and i see sherwin williams paying $113 for a competitor valspar in cash. a huge premium over the $83 friday closing price. v is for valspar. the stock was down 2%. it was losing to none other than sherwin williams. the declining business clipped their sales from $150 million to $180 million. the dollar was crimping earnings. now you get a combination so it's a further reduction in the number of paint companies. it will be really the only competitive players. sherwin williams -- i think you can raise numbers on this news.

stock price seems silly giving us the bid for sherwin williams. the implications of the deal. you would have thought the under perform ing valspar would have made a good short. company has been losing market share, doing worse than rivals. anyone short valspar won't wants to drop out now. you can tell mna is picking up and we are getting a lot of deals. we just saw the deal for columbia pipeline. another deal were starwood last week and again today. we know johnson controls and tyco are emerging. data analytics company ihs is buying market. that's really a sensational market data company based in london. third, it seems there could be more to the bid. g, sherwin's competitor could be interested. maybe they like to look at rpm, one of our favorites.

that frank mitch said could be under valued. if you like rustoleum you might agree and this is a reminder of the intrinsic worth of companies in mundane businesses nobody seems to care about. the paint company stock was downgraded last week by the research department of key bank stating profits have been challenged and it has little upside. the operative term was it had little upside because now the upside is terrific. or i should say it was terrific to all that were in it. as gratifying as watching the way to houston by way of louisville. stick with cramer. (ugh.) does your carpet ever feel rough and dirty? don't avoid it, resolve it. our formula with a special conditioning ingredient,

it's resolve, so you know it cleans and freshens. but it also softens. resolve. a carpet that welcomes you. and to clean pet messes, try resolve pet expert. i take pictures of sunrises, but with my back pain i couldn't sleep and get up in time. then i found aleve pm. aleve pm is the only one to combine a safe sleep aid plus the 12 hour pain relieving strength of aleve. i'm back. aleve pm for a better am. hey sweetie, it's time. eye of the tiger tv anncr: good afternoon everyone. morning rituals are special. when you share what you love... ...with who you love. kellogg's frosted flakes.

told you friday i was concerned about mattress firm and the company reported a disappointing quarter after the close. they tried to say the ebitda would be good next year but

i also said nike would be good. stolen from the upside because of a jpmorgan upgrade. i still think nike is fine. i like to say there is always a bull market somewhere. i promise to find it for you on "mad money." i'm jim cramer. see you tomorrow. hello everybody. this is "early today." we want to begin with breaking news at this hour. several people dead and more wounded following an explosion at brussels airport at belgium and reports of multiple casualties p. casualties. the number of dead and wounded is unknown at this hour. it's too early to tell if it was terrorism or an accident. but we understand that the brussels airport did tweet out