In light of paint and coatings giant Sherwin-Williams (NYSE: SHW) buying competitor Valspar (NYSE: VAL), Jim Cramer decided to inspect the deal and came up with one hidden winner.
Coatings company Axalta (NYSE: AXTA) is the relatively under-the-table beneficiary of the deal, in which Valspar had to forcibly sell its valuable wood coatings business at a discount to Axalta in order to be acquired.
As a result, Axalta is left with a profitable business purchased for a bargain, a way out of the embattled automobile space, and more exposure to the expanding North American housing business.
"I think Sherwin-Williams is a winner here with the Valspar acquisition, I've been saying that," the " Mad Money " host said. "But I also bet maybe the biggest beneficiary from this deal turns out to be little Axalta, since it's getting Valspar's wood coatings division for a total and complete bargain. What's not to like?"
Thursday's market surge intrigued Cramer, so he decided to look at the day's earnings reports to find where all the bullishness originated.
"There are a couple of joyous weeks every quarter where we hear from individual companies that their collective results are actually able to control the agenda of trading," the "Mad Money" host said. "They serve as the preponderance of the evidence about how companies are really doing, how their stocks should perform, and, by extrapolation, how strong or weak the broader economy may be."
In other words, major institutions like the Federal Reserve or the Department of Labor typically hold sway over the market. But during earnings season, a flurry of strong reports can coax a positive response out of the market on its own.
Cramer also spoke with Nicholas Pinchuk, CEO of tools and equipment maker Snap-On (NYSE: SNA), who shed light on the company's ability to scale up, and the recent visit paid to it by President Donald Trump .
"What I told the president is one of the key things about Snap-On ... [is] our people generate customization in the midst of consistency," Pinchuk told Cramer on Thursday.
The CEO touted the company's scalability as their stock keeping units (SKUs), or components of their inventory, exponentially grow in number.
"We keep improving our processes, but we have more and more customization. So our SKUs just keep expanding, but because we have capable people trained that are very, very skilled, we can manage that consistency," the CEO continued.
And with a booming diagnostics business helped by the rise of computer-connected cars as well as consistently growing European sales, Snap-On is looking to Cramer like a more and more attractive play.
Activist investors demanded changes in companies from Buffalo Wild Wings (NASDAQ: BWLD) to Arconic (NYSE: ARNC) to Whole Foods (NASDAQ: WFM) in the last few weeks, so Cramer also took a closer look at how and whether these activist strategies actually work .
The most convoluted fight for control is the one over high-tech aluminum producer Arconic , which was created from industrial giant Alcoa's split last year.
Activist investor Elliott Management, led by Paul Singer, has been gunning for Arconic CEO Klaus Kleinfeld , which the activist fund believes has been doing a poor job leading the company.
While Cramer favored the Alcoa- Arconic split and Kleinfeld's history as CEO, the "Mad Money" host said it is time to give Elliott's team and their "excellent slate" a chance.
Finally, Cramer spoke with JPMorgan retail analyst Matthew Boss about the rare winners of the brick-and-mortar retail sector.
Boss said he sees those winners pursuing two aspects that he believes are key to staying afloat during the rise of e-commerce.
"Convenience is Amazon (NASDAQ: AMZN), convenience is e-commerce. It's value and convenience. That's what the off-price sector has today," Boss told Cramer on Thursday.
Over 4,000 store closures have been announced in the past 18 months, many of them department stores. Boss said that while the department stores' biggest obstacles are a lack of convenience and value perception, the closings could signal a turn in the embattled sector.
In Cramer's lightning round , he sped through his take on some caller favorite stocks:
CenturyLink (NYSE: CTL): "I know CenturyLink made that acquisition and I think it's a good one and it should help their cash flow, but I don't like to reach for yield. When I see an 8.4 percent yield, that's actually a red flag for me. Yes, it could be, but I just can't recommend something where that yield is so large that it seems difficult for anyone to be able to pay that kind of payout right now, so I'm going to say no, don't buy."
Raytheon Company (NYSE: RTN): "Raytheon's good. It's No. 2. I like General Dynamics (NYSE: GD), then I like Raytheon, and then after that I like Northrop Grumman (NYSE: NOC) and then I like Lockheed Martin (NYSE: LMT), Lockheed Martin having such a big move already."
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