This good news, dow sinking nasdaq climbed. 39 , but if it is finally the beginning of a wave of deals. That can be great for everybody and not just the Companies Involved in the takeovers. Thats right. The huge deals announced today, publicists and omnicom merging for the Worlds Largest advertising agency. Paragon lowering its tax bill and hutches bay picking up saks to tack the u. S. Luxury market. That will create a positive background that could fuel the next leg of a market. Let me first point out the life blood of the stock market. Its a huge component of the health of individual stocks because it reminds us these arent just pieces of paper were trading. They are Real Companies with real prospects and real worth that should be owned, not just rented. Im not being too obvious. Weve had very few mergers this year. It has led many to believe stocks are too high or companies would be buying each other, so takeovers inspire awe, wake up. If you own these stocks you find yourself instantly richer. Perhaps just as important, if youre shorting stocks, then you wake up and suddenly, you are insecure on these positions. You want to cover the shorts or buy them back, propelling major parts of the market higher. I also regard these type of High Frequency businesses that prey on the rest of us. The insider traders may have known about the takeovers ahead of time, but cant stop the rest of you from making money with their machinations. The concept of merger monday was well engrained. Get the job done and develop this classy monicker. It was always reassuring that companies wanted to buy other companies because it confirmed what we were paying for ourselves. Merger mondays disappeared and weve been puzzling about whether theyve been back giving us a run up to the stock coupled with a lack of confidence among so many Business People that you hear about constantly and then today, first time this year, the day deemed worthy of merger monday monicker and thats fabulous news to the bulls in the audience. So, lets be constructive three deals. The biggest to create the worlds top advertising agency. 35 billion fee to take on or fend off the digital competitors, namely facebook and google. Omnicom jumped five bucks in the deal, then closed down 36 cents. Do you know what . To me, that means theres still an opportunity to buy omnicom here. As shareholders, well get a dividend and reap the benefits. Far more gains that might be lost by obvious represents both pepsico and cocacola. Thats not going to stand. Why the defensive nature of the deal . Because advertisers are going directly to facebook, google and twitter, cutting out traditional firms. I dont think this merger can stop that flow. If anything, if i was running one of these companies, i would have sought twitter. Two old line ad firms do not necessarily have the smarts to go mobile. Thats something facebook, twitter and google, to another extent, salesforce. Com know how to do. With younger people increasingly turning to their mobile devices for all sorts of news, sports and entertainment, you cant afford to let facebook and google dictate the terms to their clients. Tv, web, print, radio, thats going to be viewed as a positive by the clients. Somehow, the combined entity can wren f better terms from the online ad world. Second deal is kind of a puzzle, frankly. Its a head scratcher. Irish drug company for 8. 6 billion in cash. Perrigo is a maker of knock off store brands, over the counter drugs. They can manufacture these products cheaply and charge less than the competition to make much more money than they do when they offer products of big name players like Johnson Johnson and proctor and gamble. Its basically a royalty stream for a bunch of pharmaceuticals. The ms drug made by biogen. Thats not like the perrigo we know. This deal allows the company to shift its status to ireland, changing the tax rate to a much lower rate. While i wish there were more to it than that, the combined company will have higher after tax earnings. For more people, that is what matters. The third deal is the one that makes the most sense to me. Hudson bay, Canadian Department store chain buying saks. For 2. 4 billion for 16 a share. I know given that the stock went out at 15 and change friday, thats hardly a home run. Remember though, saks was at 11 when the chatter began, so youve gotten a gigantic return. Weve been pushing for Something Like this to happen to saks for some time. Saks has been in retrenchment mode, the victim of an insanely aggressive plan from a previous management team, not steves. Every year with the growth coming from online and outlet sales. Hudsons bay can spot l and ts into the real estate vacated by saks future closers. They were way too upscale for the neighborhood. Steve tried to make as much as possible with this deal. He has succeeded. He is a man of his word. Congratulations to saks shareholders. All three deals have different rationales in the best market in the world, but more importantly, the stocks represent good values. Even up here, where so many say they have run too far, too fast. Some guy talking to judge wapner, talking about dow 5000. These deals say just the opposite. Elan and saks, which had already run a great deal. They give the bulls the hope that the runs not over and another leg up could be upon us. Despite years of fed tapering, faltering china, japan in jeopardy, they lead a higher valuations for other companies. Shire, pharma, another irish drug company or macys, which we believe is is the best in show. So, heres the bottom line. If you believe as i do that the stock market remains undervalued, you woke up this morning with a validation from three sectors. Advertising, drugs and retail. That in the end is why we welcome back merger monday. Particularly on what should have been just a sleepy july day. And it should mean much to those who embrace the market, and perhaps more importantly, to those who doubt it. Mark in california. Hey, jim. Thanks for taking my call and booyah from the inland empire. Oh, man, i love the inland empire. I used to go to the ontario racetrack. How old am i . The cars, thats a good segue. My question is about tesla. Id listen to you for a while. I listen to you all the time, so i know you were kind of down on them a week ago. I heard you know and i guess my question is theyve got earnings coming up and i know they were beat on announcements today, so everybody with electric, General Motors and their volt. I want to clarify what people have been saying about me and tesla. When tesla came public, i said it was overvalued and it was and it did absolutely nothing. There was a really, really good call versus many other stocks i recommend. After i saw it, it got hot. That was about 100 points ago. I said it was a cold stock, but can go higher. I dont know why people think i hate it. I drove a tesla. I loved it. I went to bmw today, but its a cold stock and because its a cold stock, i cannot use the traditional metrics i like to use to be able to reward you with something on conviction. To fight people against the stock, that is just a crock, okay . I had to get that off my chest because im tired of hearing that. I hate that stock. Its just untrue. Bobby in louisiana. Hello, jim. How you doing . Okay. What about dell and the buyout . What about dell . I think you should sell, sell, sell. Why . Because i view that there is because i view that there is very little upside and three or four points downside. That is not a situation i like. Im trying to get everyone to ring the register at dell and move on to a company with actual upside. Zach in california. Hey, there, jim. Booyah from southern california. Nice. My question is about uncle medicine pharmaceuticals. Yesterday it was down 32 since the recent ipo, but today, it rebounded up 8 . Do you think it can keep going and meet or surpass its original market price . Ive got to check into the most recent, different. They had a bunch of trials. Some have been disappointed. Others havent. Ive got to go do more work. Thats just not good enough for my audience. I like the audience too much just to say hey, looks good. Its not the way we play it. Sell in may and go away, debunked again today. Merger mondays, well, we had one today when you least expected it. Wake up call that the market is indeed still undervalued. Well be right back. Coming up, black ink. Declines in the printing business caused hard times for rr donnelly, but investments in new technology has reignited the stock, now up over 75 this year alone. Is the time it starts printing profits for you . Dont miss cramers exclusive. And later, the perfect brew . Starbucks just served up a street shattering Earnings Report that made Company History, and its not just about the morning joe. Dont miss cramers breakdown. The anatomy of a piping hot quarter. Plus, on a ride . You may not be on board with School Bus Operators student transportation, but with an outside dividend and its eyes toward a new future of fuel, is it time to hop on, or could this stock be ready to stop . Cramer talks to the ceo. All coming up on mad money. Follow jimcramer on twitter. Tweet cramer madtweets. Send jim an email or give us a call. This is a market that loves comebacks. A month ago, i explained how rr donnelly and sons, a Printing Company that you think would be obsolete, has come roaring back. Since then, the stock has given us a terrific 25 gain, much better than the s p 500 in the same period and i think it would have more room to run. Its the largest player in a fragmented market and has great digital and ebook business where they transform all things publishing into ebook format then distribute them. It pays a tremendous 6. 5 yield. Lets talk to the president and ceo of rr donnelly and sons about the quarter and his companys turn around. Welcome to mad money. Thanks, jim. Thank you so much for coming to the set. Now, i know that a lot of people have written you off, but it looks like from the cash flow tonight, theres a lot of room to run and the dividend looks pretty darn safe. To steal one of mark twains famous quotes, my death has been greatly exaggerated. Weve got the panoply of products and i think a lot of people know you as when you get a catalog, its printed by you. Get a phone book, good chance. A lot of people are online shopping. A lot of people felt this business has to be challenged, but youve reinvented a lot of other things. Were 150 years old next year. Weve gone from the year 2000 from having seven products and 2013 and having 15 products. Weve taken what was a long run business, magazines, catalogs, inserts, that was 80 of our revenue in 2000. Now less than 30 . The catalog is still driving people to purchase, and as you look at some of the Great Companies that we work with, that catalog is a Sales Channel for our customers, and as you think about people that we work with, all of them are using every media possible to go ahead and communicate with their customers. When i look at this, this is, i actually have these. These are great headphones. You would make the box of it . Theres a box, a label, material inside that. Five years ago, that never existed, so everyone whos talked about the printed pieces going away. Weve evolved. Weve innovated, weve evolved, and we do that and also for the electronic devices, such as e readers, we are also involved in those, packing and shipping those out. So, im writing a book right now. When it goes to my publisher, amazon will want an ebook. You get involved . Lieber digital takes whatever the content is and formats it to whatever device its going to go to. Whether its your mobile phone, blackberry, ipod, ipad. Whatever it may be. Your laptop. So we are then taking that content and making sure it can reach again whatever that consumers using at that particular time. And youre also distributing quarterly reports. How does that business work . Because to me, why are you proprietary in that . Its a great business for us. If you look at our quarter, too, i think financial did come back strong with the ipo market being one of the best its been in a while. When you think about mutual funds, we play a role there. With our tagging capabilities, weve got the ability to take that data that youre sending in, that people trust us to deal with and get that out to the investors. Im holding up the quick response. This is a company that r donnellys doing, too, which is labeling. Were doing more and more rfids. Its an intelligent label. Its still the label process. Its a printed process. What we can do as a result of it being a printed process, we can shorten the cycle time for companies to use our binding. Its being used for what i would call inventory tracking, supply chain management, lost goods. Especially good for retailers in pharma. We want to make sure if youve got high value drugs, theyre getting to where they need to get to. A lot of people are going to say to me, jim, you looked it because of the dividend. When we saw the earnings per share, the common stock is 45 cents. That compares to 49 cents. Thats a decline in earnings per share. Thats not necessarily the way to measure what youre up to. No, i would look at our top line. Pensions, not a friend of ours this year. Taxes arent a friend of ours. If you go back to pensions. A lot of people hit us hard on, we had a liability because of operation twist. That was about a billion four as a result of the discount rating coming down when the fed took their action. With rates going back up, we reduced that by about 30 percent since year end, so thats a huge differential for us as we go forward. And also, just on the revenue growth, which i think is so important. This is the seventh quarter in a row now that youve had organic revenue . Weve got 100 of the fortune 100. Financial. For all products. All products. 60,000 customers worldwide. Were in 37 countries and touch 14 different time zones. All the things weve got going on, from going from a printer to print services to Global Communications provider, is taking place and starting to come together. Now, do these Old Fashioned printers, with the phone books youve got here, is it just because people dont know the new donnelly does it pay to get rid of the old donnelly and just focus on the new donnelly . Our print Service Offering is going to be key. Prints not going away. Without newspapers, just in the united states, print is 119 billion business. Weve got 7. 5, 8 billion of that. Cut it in half, say it goes down to 60. Were still a small piece of whats going on there, and we dont believe its going to go away. The channel thats being approached, it is both physical and electronic delivery thats taking place that our customers are communicating with their customers. People have just underrated you. I find this happens a lot where people have an image of what a company is. The company worked diligently to be not what you think it is and the message doesnt get through, which is why im so glad you came on the show. We appreciate it. We think weve got a lot of things going on from the Technology Capability side, but more importantly, from a communications standpoint. Were touching creation of the content, managing the content, distributing the content and most importantly, measuring the content for our customers. Our customers are number one. Weve got to make sure we reduce their overall cost and improve their return on their investment. Its like a great little story. Okay. I want to thank tom, president and ceo of r. R. Donnelly and sons. Go through this quarter. Look at all the new products. Youll understand why its not so crazy to like a Printing Company that actually has only one bit of its company being printed the way you think it is. Well be right back. Coming up, the perfect brew . Starbucks just served up a street shattering Earnings Report that made Company History and its not just about the morning joe. So, how did the brewing behemoth do it . Dont miss cramers breakdown. The anatomy of a piping hot quarter. announcer scottrade knows our clients trade and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Voted best Investment Services company. Time to have new experiences with a familiar keyboard. To update our status without opening an app. To have all our messages in one place. To browse. And share. Faster than ever. Its time to do everything better than before. The new blackberry q10. Its time. This is a flywheel. What does a flywheel have to do with investing . For the nonmechanically inclined, the fly wheel is a rotating mechanical device thats used to store energy. You might note they collect energy over time, then release it to provide a big boost of power. But what you probably dont know is the success of starbucks, including an amazing quarter just reported, one that added 3. 5 billion instantly, is based on the concept of the flywheel. Howard schultz, the ceo has created a strategy just like a flywheel because it stores energy, then emits that at a level that exceeded the original power source. It includes 19,000 stores and global footprint growing by 500 units a year plus a rapidly expanding consumer business, coupled with the best in class social capabilities and a nonstop pipeline of innovation. And the energy that a flywheel produces gave starbucks the best samestore sales growth of any company i follow, with an 8 and a stunning 9 in the americas and asia pacific. Allows the company to report much better numbers than it should, including numbers that seem metaphysically impossible. Starbucks has made itself into the stock equivalent of a perpetual motion machine, which is why we have to examine this quarter because it contains everything you want a company to deliver. Yes. This has now become the new Gold Standard for a new threemonth period, one that seems impossible to top. One thing that schultz admitted, he was stunned to deliver the top number, but that it would be irresponsible. His words, he said the number be repeated. Hes saying its not the issue. The issue is were building a Great Company and the comps are going to follow that, end quote. In an era where many