Mad Money

Cramer: Deals trying to escape the tide of negativity

Jarden-Newell match made in heaven: Cramer
Jarden-Newell match made in heaven: Cramer

Despite all of the negativity in the market on Tuesday, Jim Cramer saw great deals being made that were either happening or in the works.

"These deals are occurring with under-appreciated companies that are nevertheless doing well, companies like Keurig and Jarden and Newell Rubbermaid," the "Mad Money" host said.

JAB, the family of European multi-billionaires that seeks to challenge Nestle, announced on Monday that it was buying Keurig Green Mountain for $14 billion. Cramer thought this was a perfect example of how undervalued companies in the market are being pulled down by worries of plunging commodities and an interest rate hike.

What do these three companies have in common? They produce things found in the home.

Keurig Green Mountain Coffee Roasters single-serve K-Cup coffee capsules are shown in New York.
Scott Eells | Bloomberg | Getty Images

Statistics show that roughly one in every five households has a Keurig machine. Cramer interpreted this as being one of the greatest stories of our era, and clearly JAB understood that it could make a lot of money owning such a company.

"Frankly, Green Mountain could have made that money too; they just weren't able to fix their machines fast enough to preserve their independence," Cramer said.

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However, Green Mountain did fix a lot of the damage inflicted on itself in 2014. It confirmed that it was doing great via the huge buyback and dividend boost that it just announced, yet almost no one cared. The same people that hated it before hated it after. Cramer thought Coca-Cola would swoop in and buy the rest of the company given that it already has a major stake in it, but that was not the case.

Newell Rubbermaid is another stock that has been soaring for a while, and yet the stock has remained relatively inexpensive. Its brands such as Levolor, Graco, Sharpie and Rubbermaid have spread their tentacles through the aisles of big box retailers, even as the rest of retail has struggled.

Meanwhile, Jarden has become known for its great growth acquisitions. It is legendary for taking old brands and infusing them with new life, which has allowed the company to expand and systematically beat the numbers. The stock failed to be rewarded, up less than 5 percent for the year.

However, that changed on Tuesday when talks of a merger between Newell Rubbermaid and Jarden surfaced. The combination of these two companies will allow them to bargain better with the big dogs like Wal-Mart that are looking to snap up the profit margins of both companies.

"I think both deals are fabulous for shareholders. All three of the executives involved should be applauded. They didn't have to do these deals. Their stocks could ultimately have worked their way higher because of superior performance," Cramer said.

These companies wanted to get higher faster, and escape the tide of negativity that has swept the market and make money for everyone involved.

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