Mad Money

CEO generates huge value: Cramer


Jim Cramer believes it's critically important to research the leadership team at a company before buying its stock.

And he says this CEO is a perfect example of a leader who made shareholder value a top priority.

The CEO is Bob Gamgort and his company is Pinnacle Foods, the company behind Birds Eye Foods, Duncan Hines Vlasic pickles and more.

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On Monday, Gamgort for $4.3 billion; the offer values Pinnacle at $36.48 per share, a premium of about 20 percent to Pinnacle's closing price on Friday.

Cramer wasn't surprised. He says from the moment the company went public in March 2013, Gamgort actively worked to bring out value. "He introduced an outsized dividend and promised more dividends down the road. He also cut costs and made strategic acquisitions. And he focused efforts on becoming more natural and organic, one of the most dynamic trends in the food industry," Cramer said.

Cramer often talks about the abilities and pedigree of a company's CEOs as critical metric to consider when putting money to work in a stock. And if anybody has pedigree it's CEO Bob Gamgort. "He came from Mars, one of the best food companies in the world."

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All told, the preceding events illustrate why Jim Cramer so often tells investors to do thorough research and identify top notch CEOs as part of a larger investing discipline.

Quite simply, Cramer says, investing in the right CEO can make you money.

"Pinnacle Foods is the kind of tale that gives this class of assets a good name and Gamgort gives managers a paradigm for all to follow. Congratulations Bob and all the shareholders who have benefited from this terrific 15-month run," Cramer said. Since coming public in March 2013 shares have returned 56 percent.

Call Cramer: 1-800-743-CNBC

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