Companies are worth more than they're selling for, Cramer said Monday.
Consider a recent slew of takeovers, the "Mad Money" host explained. Conglomerate Danaher brought diagnostic tool company Beckman Coulter for $6.8 billion. Meanwhile, oil and gas name Ensco purchased Pride International for $7.3 billion. In the year leading up to the transactions, shares of both Beckman Coulter and Pride International were up by more than 20 percent. That means the buyers, Danaher and Ensco, were confident these mergers would make their shareholders money.
"Just by buying companies at a premium to what the market's willing to pay for them, these acquirers are able to increase their earnings prospects within the next year," Cramer explained. "That's the definition of a situation where companies are too cheap in the real business."
In addition to these kinds of acquisitions, Cramer thinks stocks are cheap because of how they're being traded. F5 Networks , for example, saw its stock sell off after reporting a quarter that disappointed Wall Street. It stock fell from $144 to $106 a share, or 25 percent. In a few weeks, though, investors became bullish on FFIV again and the stock has rallied back 20 straight points.
Being as the market has been too forgiving and forgetful of negative news is another sign stocks are too cheap, Cramer argued. Take Apple, for example, which recently saw shares tumble after it was announced CEO Steve Jobs would take another medical leave of absence. On Monday, Apple's stock made another high.
The market is just too cheap, Cramer said. Investors shouldn't panic and be quick to get back in, though. He thinks we could soon get another pullback, allowing investors to buy stocks at an even greater discount.
When this story was published, Cramer's charitable trust owned Apple.
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