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Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday June 2.

The Urge to Merge: Johnson & Johnson (NYSE:JNJ), Stryker (NYSE:SYK), Zimmer Holdings (NYSE:ZMH), Smith & Nephew (NYSE:SNN). Other stocks mentioned: Exact Sciences (NASDAQ:EXAS), MannKind (NASDAQ:MNKD)

There is an increased "urge to merge," and create value for shareholders. Stryker (SYK) was rumored to be taking over its British counterpart, Smith and Nephew (SNN), and while Stryker's management denied the rumors, both stocks rallied significantly on the chatter alone. Zimmer Holdings (ZMH), another medical device play, is taking over a private company, and the stock moved 10 points in a single session. This deal will dramatically increase Zimmer's market share. Cramer thinks that if Stryker doesn't want to buy Smith and Nephew, Johnson & Johnson (JNJ) should consider snapping it up.

Cramer likes JNJ's fundamentals; it has risen 69% in two years and yields 2.7%. Cramer has said before that JNJ should break itself up to unlock value. If JNJ isn't going to split off its divisions, it could beef up its medical device segment with an acquisition to fend off competition. JNJ could grow its market share significantly with a Smith and Nephew acquisition, and Cramer thinks it should spin off its medical device company and merge it with Smith and Nephew to combine a value-unlocking breakup with a market-share grabbing acquisition.

Cramer took some calls:

Exact Sciences (EXAS) is a stock Cramer recommended for a trade, but the move is over, and he doesn't see a reason to buy it now.

Mannkind (MNKD): Cramer said he didn't think its device "had legs," but the company has surpassed Cramer's expectation.

Stocks Are Not Commodities: Hillshire Brands (NYSE:HSH), Pinnacle Foods (NYSE:PF), MeadWestvaco (NYSE:MWV), Dean Foods (NYSE:DF), WhiteWave (NYSE:WWAV), Apple (NASDAQ:AAPL), Allergan (NYSE:AGN), Broadcom (NASDAQ:BRCM), Dow Chemical (NYSE:DOW), Groupon (NASDAQ:GRPN)

Why can't we admit that many stocks are cheaper than they seem?" asked Cramer. The averages made a nice recovery on strong economic indicators after starting Monday. Individual stocks are more important than the averages, says Cramer, but often stocks are being treated like commodities. This tendency ignores the performance of individual companies. Hillshire Brands (HSH) made a bid for Pinnacle Foods (PF), and then a bidding war ensued over Hillshire, whose stock rose 60% in a matter of weeks. This shows that the value of companies is related to the companies themselves rather than merely what they sell. MeadWestvaco (MWV) could be broken up, and Cramer would buy the stock. Dean Foods (DF) spun off WhiteWave (WWAV), and the spin-off was beneficial for everyone involved. WWAV deals in commodity-based products, but has shown that the products themselves are proprietary rather than commodity.

Apple (AAPL), known for its proprietary products, rolled out its new operating system, but the main reason behind its move was the decision to return capital to shareholders. Broadcom's (BRCM) stock has been moribund, but is spinning off a losing division, and the stock rose. Allergan's (AGN) stock was challenged, but it is now up 89% from the last time Cramer spoke to the CEO in August, and has received a takeover bid. Those who win in investing are not those who treat stocks like commodities, but those who buy good, individual stocks for the long term.

Cramer took some calls:

Dow Chemical (DOW) is remarkably run whether it does the MLP or not. Cramer would own the stock up to $60.

Groupon (GRPN) has so much value buried within it. It has come back down, and Cramer would buy it.

CEO Interview: Gary Evans, Magnum Hunter Resources (NYSE:MHR)

Many domestic energy companies are close to their all-time highs. For the more risk averse, Magnum Hunter Resources (MHR) might be a good speculative play. It has high-quality assets and is ramping up production; it increased production by 110% yoy. The company is cleaning up its balance sheet. The stock has pulled back 15% from its April highs, but Cramer thinks it could renew its rally. CEO Gary Evans discussed successful efforts in raising funding and selling off non-core assets. The possibility of starting an MLP is "very manageable," said Gary Evans, and he added, "There isn't a better growth story in the United States for gas than Marcellus and Utica, and we have it stacked. We have our Marcellus (assets) right above our Utica (assets), right along the Ohio River, and no other company has that." Cramer would consider Magnum Hunter as a speculative stock.

CEO Interview: Ed Heffernan, Alliance Data Systems (NYSE:ADS)

Alliance Data Systems (ADS) has a terrific track record and a long-term theme, but its earnings didn't impress the street. The company produces store credit cards, loyalty cards and other marketing services that allow companies to retain customers and collect data on purchases. The stock has risen 45% in the last year, but has risen just 5.6% since Cramer spoke to CEO Ed Heffernan in December. In the past quarter, revenues were light, and second quarter guidance was weaker than expected, although guidance for the entire year was strong. ADS stumbled, but the stock has risen significantly since. Heffernan said ADS' organic growth is strong, with the European division showing 20% organic growth. The company utilizes data about specific choices of consumers to create marketing solutions.

The "Not Sustainable" Mantra. Stock discussed: Union Pacific (NYSE:UNP)

"That is not sustainable" is the mantra of the bears. The PMI report was strong, but it was not treated as the indication of a positive trend. Often when there is a strong number, the kneejerk reaction from bears is to interpret the number negatively, assuming it is based on a one-time event. The other approach is to look at positive data in the context of QA, and the belief that the performance will be worse once the Fed stops buying bonds. Union Pacific (UNP) CEO Jack Koraleski is hardly one who wears rose-colored glasses, since he made negative remarks when things were genuinely down. Recently, the CEO made bullish remarks about agriculture, coal and auto transports, and these were greeted with skepticism. "To the bears, everything is unsustainable, except for the bad news," said Cramer.

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Source: Cramer's Mad Money - Will Johnson & Johnson Have The Urge To Merge? (6/2/14)