Jim Cramer: Where the Bargains Are
Every time this happens -- literally, every time -- a big bump comes from the acquirer, not just the target, and the bump is only day-one of what can turn into a multiquarter move. That's why I think you can actually buy Actavis
I come from an era where the acquiring stock almost always goes down or sits there forever as people try to figure out why the deal makes sense. I come from an era that says that when a company buys another company, it is usually out of desperation.
That's why the acquirer has historically gone down. But this deal -- like so many that have occurred in the airline, rental car, media and telecommunications/cable sectors -- is immediately wildly accretive and makes so much sense that you can only ask what took so long.
It's one of the reasons why I was hoping that Men's Wearhouse
It's also why I think the retail industry in general isn't a great place to be. They are way overstored, just far too many of them, and their reluctance to get together has hurt them mightily. That and the ability of J.C. Penney
When they do consolidate, it is amazing. For years, there were dozens of drugstore chains duking it out, including many private and smaller chains. Now there are only three, and the performance of all of them has been nothing short of fantastic. Walgreen
Consolidation tells you there are bargains. Companies that don't want to do deals simply aren't being creative enough. They should all be sentenced to reading my chapter on consolidation in Get Rich Carefully 10 times over. Maybe then, they would get it!