Unmet needs or changing courses during changing times. Yet, its a terrific part of this amazing longterm rally, including today, where the dow climbed 39 points, s p advanced 1. 2 and the nasdaq gained 0. 23 . I know this factor is underestimated because i see it every day. This morning we got a textbook example. Right now theres a widespread perception that stocks are expensive. You hear it all the time, bubble, bubble, bubble, bubble. If you did read this mornings wall street journal, you might have see a story entitled frostbitten costco is on thin ice. In this ahead of the tape al article, we see the kind of negative bias thats become so characteristic of this moment. This story says and i quote, thursdays results of course meaning this morning had the potential to disappoint, given that the stock is more richly valued than oush usual. Whats the worry here . Another month of zero samestore Sales Numbers growth or worse may make investors see the tank as half empty, rather than half full. Fortunately, this ahead of the tape column was actually behind the tape because costco released its earnings at 3 00 a. M. This morning, and what were they . They were spectacular with an amazing 8 samestore sales increase for the quarter and a 4 gain for the very cold month of february, not zero, not negative. So, what does this tell you about this particular market at this particular time . If you read the article before you saw costcos results, your mind races and you think, oh, my scary. Very expensive stock, has run way too much like so many others. But then you see the actual numbers and you have to do a radical revaluation, because costcos neither frostbitten, nor on thin ice. Its undervalued, and yes, underestimated. Why is that . Because i think neither the journalist involved here nor his or her editor nor the people whom they interviewed for the article recognized how strong ceo Craig Jelenek and his team really are. So whatever bubble you may thee costco may be caught up in, its directly contradicted by the facts. Perhaps the 66 billion retailer is worth more than what its selling for based on these numbers, not less. Or kroger up nearly 7 today, after reporting an incredible quarter. Ive been pounding the table on this kroger story since spending time with management and recognized how competitive they are and how theyre leveraging their scale to wrench the profits from the Food Companies that supply them. I like krogers strategy of consolidating a once fragmented industry. I like the krogerization they do once the accusations are completed, where they use their buying power to bring down costs. They are the smartest at integrating sales on all levels. Hey, listen they hired r. R. Donnelly. They integrated an omnigeneral approach from Groceries Stores going from fliers to your home to instore promotions. Thats brilliant they have the highest penetration of highmargin private label store brand merchandise and the Largest Selection of natural and organic products within the Traditional Grocery format. Krogers samestore sales are peerless and rival whole foods numbers, exceeding them last year when they had 4 gains, and they just did it again, a 6 number this morning. Thats amazing for the nations second largest supermarket chain, which you would have thought was dramatically overvalued given the run its had. These guys are taking share from everyone. You name it. And you know what . Its not over. Its such a juggernaut that i had to go see it for myself. I couldnt just say, oh, well, kroger, kroger. No i had to go kick the tires. So, i went to fred meyer. Thats a kroger division. During a recent trip to klamath falls, oregon where it was by far the nicest supermarket for miles. What did i find . You know how segregated many supermarkets are between the regular pant entryry goods and the ghetto of natural and organic . Not at kroger. The merchandise was integrated right in the aisles with the regular goods and the prices are so competitive, you cant believe it for natural and organic, thats right lots of people out west by the way, have revoted against the allexpensive and consuming and taking up landfills packaging that many foods have come in. They are revolting against packaging packaging. Kroger had aisle after aisle of containers of fresh goods, fresh seeds, fresh nuts other goodies that you lift up a latch and the stuff comes pouring out right into a baggie you can grab at the stand. No plastic, no large things no liner board, just the food packageless. Their produce was more natural and organic than the other way around. The displays were beautiful. I even tweeted one jimcramer. And when i checked out, i listened to all the cashiers talk to customers about what their store could be doing better. They knew many of the peoples names. They talked to me like i was, like, from klamath. I liked it. Ive been going to the same supermarket for years. No one knows me. Okay . What krogers doing, its called execution. Its the reason why krogers still inexpensive, even if its sponsor moved from 50 to 74 over the last few months. Bubble . No. Value. Then take pharmacicla. They had a market cap of 36 million. Today they caught a 21 million bid from abdi even though it was already up more than 88 year to date. I felt terrible about it. I think they dramatically overpaid, but you know what . There was not one but two other bidders besides abvi including j j, and thats the companys 50 50 partner for major antiblood cancer franchise. Now, without a bid, pharmacyclics hopelessly overvalued, bubble bubble bubble, bubble. But wait a second it could have a drug that could be a blockbuster, okay. Johnson johnson was said to have won the bidding war for the company, according to the new york times, which, of course articles wrong the moment i read it. But at the last minute avdi came in with a preemptive blast of stock and cash. Why so much . Because abbvie has a new drug thats about to go off patent over the next couple years, and without a replacement, abbvie will see its earnings cut to shreds. Of course, it cut its stock to shreds today. They have ann met need for earnings. The drug could do 5 to 6 billion sales by the time the other goes off patent. Half goes to j j because of the partnership. They have other drugs, too which could accrue to abbvie making it more valuable but pharmacyclics seemed like a bubble yesterday, but then a Smart Company made a bid versus some other smart companies, calling into question the whole idea of the bubble valuation. It also makes sense that youd think that isis pharma receptos and biomarin all of which have been on fire are cheap. Cheap the way pharmacyclics was, because they too can get bids and you know we like all three companies and have championed them for more than 100 some cases. And lets not forget valent and activist, two Major Drug Companies whose stocks have rallied pretty much nonstop since acquiring salyx and allergen allergen, although we heard endless chaleter about them overpaying. Can we just stipulate that they didnt pay too much . Even as actavis did buy allergen for more than twice of what people thought it was worth. At 200, i thought it was nosebleed, but people who bought the stock feel great. How about the semiconductor or avaga. They were duking it out with competitors and then merged within moments of the cant beat them join them philosophy. Why not . If a combined company can combine a one stop shop for chips that can go into cars or homes, it is indeed a standalone, but bold . No. Just combine companies that have more earnings power than two Standalone Companies would. Finally, let me give you another accessible one, just so people dont think im cherry picking. Darden, parent of olive garden. For years, its been a poorly managed restaurant chain that included red lobster. It was terrible execution quarter after quarter. Then, the board replaced the ceo and since then the stocks been off to the races. A company that had been run poorly at 44 bucks is now a wellrun institution at 64. Bubble . No, undervalued company that after execution is now fairly valuable. Some bear could argue that all i did was pick the absolute best examples and theres another 6,000 stocks i couldnt do it with. But you know what . I did select a couple of companies to buttress my nonbubble thesis but i could have done it to many many moroz. You could contend all of this goes away if the fed raises rates, but the stocks i mentioned have nothing to do with that. Heres my bottom line there are dozens of other companies that i could have fit into this piece without any problem at all, dozens of other companies that are very well run enterprises that are continually underestimated by the pundits and the head of the tape column and so many other people who simply refuse to consider that this is a market of individual stocks, and many of these stocks belong to companies that are managed by people who are capable of going well outside whats expected of them rendering their stocks cheap, even as they seem very expensive on paper, at least until terrific results or huge takeover bids put them in an allnew light. Now, i speak to dan in wisconsin. Please dan. Caller good afternoon, jim. I have two questions. Sure. Caller you have lp selling at an additional 69 million shares of its stock at 11. 05 per share. What is the impact going to be on the stock sale tomorrow and is this a buy, sale or hold . I dont like laredo. All of those doing access capital, with the exception of theres one or two that i dont mind. But ive got to tell you, i like the ones like an eeog that didnt need to do this because they had such a good balance sheet. So, im not going to stoop to the ones that are selling capital now all the way down. Thats not my style. Busy in nevada. Buzzy . Caller booyah to you, jim. Booyah caller im a threeyear religious listener of your show. Thank you. Caller i need your opinion on Las Vegas Sands, lvs. I have a couple of hundred shares. Want to know if i should sell some, take a profit hold the rest or just sell. Okay i am very concerned about Las Vegas Sands because im very concerned about wynn too, because they rely on big junkts from china and the numbers are down almost 50 year over year. That makes me very uncomfortable. Recommending any of these stocks, even as i think that mgm does have up side because theyve got a perfect business in the United States. The other guys do too, but its too much of their business is in macau. Okay guys it is all about execution. There are wellrun companies that are underestimated. And yes, contrary to popular belief, undervalued. On mad money tonight, the fight to crush isis is fueling a boom in defense stocks. Whos best equipped to protect your portfolio . Dont miss my take. It will surprise you. And cold stocks from amazon and tesla are showing new signs of life. I know you like those, but will they take you to the Promised Land or just to the house of pain im going to separate the real from the fake. Plus, theyre the brains that keep your local car dealer on track, but this stocks had a rough ride on wall street. Ill see if we can race higher with it when i take a spin with the ceo. Why dont you stick with cramer . Announcer dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer. Madtweets. Send jim an email to madmoney cnbc. Com. Or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Help brazil reduce its overall reliance on foreign imports with the launch of the countrys largest petrochemical operations. When emerson takes up the challenge its never been done before simply becomes consider it solved. Emerson. Ever since the markets ebolainduced bottom back in midoctober, its worth noting that the aerospace and defense stocks have been absolutely on fire. This is one of the Leadership Groups that helped the market power higher. Boeing, the big dow stock, its up 33 since october low. General dynamics up 19 . Lockheed martin one of our faves for a long time up 20 . Northrop grumman up. Stock United Technologies charitable trust, up 24 . No doubt about it this sector has been a powerhouse and its so easy to understand why. A year ago at this time a lot of people were worried that the business was drying up for the defense contractors. The wars in iraq and afghanistan, they were either over or winding down. The pentagons budget had been given a haircut. If not a total slashing. By the sequester. Remember washingtons notsobrilliant plan to detain spending by cutting across the board . And the militarys a giant source of business for these companies. Fastforward to today and the defense business what can i say, its booming. Not only have we been bombing the isis lunatics since september as part of a mission that president obama has admitted could take years, but with terrorism seemingly on the rise all over the world, not to mention a shooting war going on in ukraine, even if its not exactly hot, more like lukewarm, countries across the globe are realizing they cant rely on the United States to be the worlds policeman all the time right now. We dont have the money or inclination to do so. They have to defend themselves and that means giving more business to the aerospace and defense firms that are quite literally the arms dealers to the militaries all over the world. Plus, it doesnt hurt that the president and congress were actually able to pass an omnibus spending package back in december that included a muchneeded boost in defense spending that seems to be overlooked by many. In short, you know what it is a great time to be a defense contractor. I mention all this because theres one aerospace and defense play that i think has been flying somewhat under the radar screen. Im talking about the newly minted orbital atk. And the symbol here is oa. The company that was created less than a month ago when alint Tech Services merged and spun off a Company Called vista outdoor. The new orbital atk may be smaller than the major defense titans with market capitalization of just 4 billion, but its nevertheless a top player and i think the stock deserves to go higher. Plus, at a time when defense stocks are soaring, this is cheaper than the rest of the group. I think its a bargain versus every other company i mentioned. What exactly does orbital atk do . I used to joke that the other systems dealt in lead like Steve Mcqueens magnificent seven, because so much of the business was making bullets, except it had fewer competitors than mcqiueen, but thats a smaller part of the business. The new orbital atk is a leader in Flight Systems, getting nearly 32 of its sales from space launch vehicles and aerospace structures. On top of that the company also gets 26 of its sales from space systems. Its a major builder of major government satellites and space components. Its true that back at the end of october, before the merger closed, the old Orbital Sciences had a pretty highprofile accident where one of their rockets, which was set to deliver cargo to the International Space station exploded at its virginia launch site. Fortunately, it was an unmanned rocket, but still caused the stock to get crushed. It went down 15 in two days. I dont think it ever recovered from the taint of that. However, this is the kind of story that makes big headlines, even as it doesnt really have much impact on the bottom line which is why the stock has literally been able to rally more than 40 since its middecember postrocket explosion lows. Companys insurance covers any financial damage and they have fixed the problem and will be able to resume supply runs for nasa starting next year. Obviously, i hope this kind of accident doesnt happen again. I dont want anybody to get hurt, and that tends to happen when things explode. But if there is another accident that pummels the stock, realize the last one turned out to be an amazing buy accident. Orbital atks flight and space divisions are going very strong. They were the first private developer of space launch vehicles. We talk about that all the time. Theyre the leading producer of solid Rocket Propulsion systems and are a major player in the Missile Defense business. I know obamas not a big fan of the Missile Shield idea but considering how aggressive Vladimir Putins been lately, and hes even worse than the nutty but suv petrov ill bet our al glivz Eastern Europe are desperate for us to bolster their Missile Defense systems. Plus, not only do they have 95 satellites currently in production, they pioneer human and robotic inspace snrit servicing and logistics systems. You know thats the way defense is going to go and the Company Components have more than 800 satellites in orbit. In addition to Flight Systems and space orbital atk gets 42 of its sales from defense systems, including everything from tactical missile products to precision guidance systems for artillery shells. You know theyre in use. Armament systems, ammunitions and inergetics, military double speak for explosives. Even after the spinoff of the other business orbital atk remains one of the Worlds Largest manufacturer of small to mediumcaliber ammunition as well as the plain supplier for mediumcaliber ammunition like the chain gun bp we all know the truth, which is that natos going to probably actually start spending a lot of money again and atks going to get its share. Put it all together and youve got a highquality Aerospace Defense business thats expecting 150 million to 200 million in annual revenue synergies late next year because of the merger as well as cost savings. Plus, the combinational of orbital and atk means it has a ton of crossselling opportunities. Because the merger just closed less than a month ago, there is not a lot of visibility into orbital atks nearterm prospects, which is why its cheaper than the rest of the group. Its cheaper on any metric you name. Stock trades at just 13 times forward earnings, even as, get this, general dynamic, northrupop grumman and others suffer 17 to 18 times earnings. That is a huge sdp