Mad Money

Cramer: CEOs who aren't doing squat for you

Cramer: CEOs that actually try
VIDEO11:3011:30
Cramer: CEOs that actually try

These days Jim Cramer sees that companies can be divided into two groups. Those who are actually doing something to help shareholders, and imposters who think they are doing to something to help—but really aren't.

"In a trendless market with the bias to the downside like we have now, if managements adopt a laissez-faire attitude to their companies' stock prices, they often don't go anywhere at best, and then get swept away with the tide at worst and end up lower. Sometimes dramatically so," the "Mad Money" host said.

On one end of the spectrum there is Netflix, run by CEO Reed Hastings. Cramer added that this guy seems to think of something positive almost on a weekly basis for shareholders. On Monday investors learned that the company is making a movie, called "War Machine" that is a satirical look at the work of Gen. Stanley McChrystal, starring Brad Pitt.

Plus, Netflix has been talking about a 5 or 10 to 1 stock split. And given how few shares an investor can buy at its current price, Cramer thinks this actually makes a lot of sense from a psychological perspective. Stocks with a price tag of $647 are thought to be out of reach for many small investors.





Netflix on an iPad Mini tablet computer
Ken Schafer | Getty Images

Of course Cramer considers this to be a total misconception, as the price of a stock is related to the value of the shares. That is what really determines if it is expensive, but a lot of people just look at the price tag and assume it is expensive. Thus, he thinks that the stock spit could help bring investors to the table that aren't involved in the day-to-day activity of the stock.

"I know that we could argue so what? It doesn't mean anything. However it does show that management is always thinking how it can get new shareholders and how it can get more subscribers, two things I love about this company," Cramer said.

Then there is CEO Mary Barra at General Motors. And while Cramer thinks that Barra believes she is doing everything she can to create value for shareholders, he doesn't agree. That so-called huge buyback hasn't done anything.

Then the idea of a possible combination with Fiat Chrysler came along, a company that is all about creating shareholder value, and she told them GM has scale and they don't need a merger.

"I say what the heck? Fiat Chrysler ought to go buy GM! I know, facetious, but Marchionne seems uniquely driven to get his stock higher while Barra seems awfully satisfied with her poorly performing stock. I think she should be considering anything that's logical, including this merger approach," the "Mad Money" host added. (Tweet This)

Or how about Avago? That stock has been on the move, and Cramer keeps thinking this one is unstoppable and is determined to get bigger fast with its recent acquisition of Broadcom. This brilliant acquisition will give it more market share in everything related to cellular.

The opposite of Avago would be Twitter, what the heck? Cramer has a feeling it will report a horrendous quarter and while it did make some acquisitions, investors are still pretty unhappy with it. Will it be the next My Space? Betamax? Eight track player?

"I was as enamored of my eight track as I am of Twitter, although these days I can't help but point out my eight track didn't attack me 24-7 or claim I am an idiot while watching me like a hawk. It just kind of sat there," Cramer said.

What really boggles Cramer's mind though, is that it is not that hard for a company do to what is right. Management teams already know what shareholders just want is growth, either through intrinsic sales acceleration or through mergers. They just want growth in dividends and earnings, even if earnings are generated with an aggressive buyback.

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Thus, the path to do what is right for investors is both easy and accessible. If money isn't flowing into a stock, that is a red flag that it will flow toward a management team who gets it.

"It's not rocket science, it's just common sense. But that sure seems to elude the obtuse or smug CEOs who think they are given her all she's got when in reality they aren't doing squat."

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