TheStreet.com's Jim Cramer says he at least recognizes value when he sees it.

Warren Buffett is not an idiot. He has kept his powder dry through all of this madness and suddenly, within one week, he has opened his coffers and picked up not one, but two multi-billion-dollar steals, Constellation Energy (NYSE: CEG) (Cramer's Take) and Goldman Sachs (NYSE: GS) (Cramer's Take).

These investments are the first sign that someone, some grown-up, is coming in from the sidelines, not because he has been talked into something that he doesn't want to do or understand -- which has been the case in all of the other bank financings -- but because he sees a delicious rate of return that will be hard to take away now that he has put his balance sheet to work, one of the last with any firepower to make a difference.

First, Constellation. Here's a perfectly good utility that, because of its business model, needs capital to work. It made several miscues that brought it to its knees -- a business that is a regular, good generator of income gone bad because of financing. I have no idea how low it would have gone, but as long as it was intact, it was worth a lot more than it was selling for to someone who has financing, and that's what Buffett has in spades. He stole the company.

In the current market, it's certainly nice to be Warren Buffett. Many companies are looking for cash infusions, and of course, are making calls to the dealmaking guru.

So, recently Buffett reached a deal to purchase Constellation Energy Group (NYSE: CEG), which operates a variety of energy assets such as nuclear power plants, for $4.7 billion. To do this deal, Buffett used his MidAmerican Energy Holdings Co. vehicle, of which Berkshire Hathaway (NYSE: BRK.A) owns 80.5% of the common stock.

As should be no surprise, Buffett wasn't the only player interested in the deal. In fact, KKR, TPG and Electricité de France (EdF) made a bid for Constellation as well and were actually willing to offer 32% more.

But Constellation rejected the bid.

Not long ago this would have been an attractive bid, but in light of the credit crunch and botched deals, private equity firms have gotten a black eye.

Regulatory approval is also problematic, especially with the involvement of French based EdF. Although, Buffett has a track record as a long-term investor, which should allay fears.

Besides, Buffett quickly invested $1 billion into Constellation so as to stabilize things as the recent financial turmoil wreaked havoc on the company. In other words, he has a lot of leverage in this deal – even if rivals put together much higher bids.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

Constellation Energy Group, Inc. (NYSE: CEG) shares are have been rallying today following a report in this week's Barron's that indicated a positive outlook on the stock. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CEG.

After hitting a one-year low of $76.40 in March, the stock has risen most of the past year to hit a one-year high of $107.97 in January. CEG opened this morning at $88.42. So far today the stock has hit a low of $88.42 and a high of $91.08. As of 1:00, CEG is trading at $90.42, up $2.07 (2.3%). The chart for CEG looks bearish and steady while S&P gives CEG a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an April bull-put credit spread below the $80 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 9.9% return in just one and a half months as long as CEG is above $80 at April expiration. Constellation would have to fall by more than 11% before we would start to lose money.

CEG hasn't been below $80 since August and has shown support around $86 recently. This trade could be risky if the economic slowdown continues, but even if that happens, this position could be protected by the support the stock might find just below $80, which is where CEG bottomed out in the late summer.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in CEG.

Even though tomorrow is a holiday in the U.S., there are a handful of companies planning to report quarterly earnings nonetheless. Perhaps some may be trying to keep a low profile; others may simply not be concerned with the American holiday schedule. Regardless, here's a quick peek at some of those companies, with the consensus earnings per share estimate of analysts surveyed by Thomson Financial compared to the previous quarter and year-ago quarter, the share price at the close on Friday (with charts behind the links), and consensus recommedations.

• Constellation Energy Partners (NYSE: CEP). Est. EPS: .48; Prev. Q.: .31; Yr-ago: .51; Shares: $19.63; Rec.: Strong buy.
• Flagstone Reinsurance Holdings (NYSE: FSR). Est. EPS: .66; Prev. Q.: .68; Shares: $13.19; Rec.: Hold.
• Natco Group Inc. (NYSE: NTG). Est. EPS: .69; Prev. Q.: .63; Yr-ago: .57; Shares: $44.46; Rec.: Buy.
• PharMerica Corp. (NYSE: PMC). Est. EPS: .08; Prev. Q.: .06; Shares: $13.86; Rec.: Hold.
• Stewart Information Services Corp. (NYSE: STC). Est. EPS: -.04; Prev. Q.: -.79; Yr-ago: .59; Shares: $32.49; Rec.: Hold.
• Trico Marine Services Inc. (NASDAQ: TRMA). Est. EPS: .77; Prev. Q.: .87; Yr-ago: 1.07; Shares: $31.92; Rec.: Buy.

UPDATED: Constellation reported .13 EPS; Flagstone reported .60 EPS; Natco reported .66 EPS; PharMerica reported .09 EPS; Stewart reported -1.74 EPS; and Trico Marine reported 2.08 EPS.

MOST NOTEWORTHY: Constellation Energy Group (CEG) and Hertz Global Holding (HTZ) were the most notable downgrades this morning.

• Deutsche Bank initiated shares of Constellation Energy Group (NYSE: CEG) with a Buy rating and $78 target; the firm said valuation is compelling as the market has barely priced in the valued of BED, the merchant plants and the PV of the current backlog.

• Wachovia started shares of Hertz Global Holding (NYSE: HTZ) with a Market Perform rating. They see limited upside to shares due to broader economic concerns.

OTHER INITIATIONS:

• Merrill Lynch initiated shares of Winnebago (NYSE: WGO) with a Neutral rating, saying shares are fairly valued.

• UBS initiated shares of KBR, Inc. (NYSE: KBR) with a Neutral and $26 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY:

• Wachovia(NYSE:WB) initiated KBR Inc (NYSE: KBR) with a Market Perform rating based on valuation, with a target range of $26-$29.

• Lehman Brothers (NYSE:LEH) initiated Constellation Energy Group (NYSE: CEG) with a Sector Performer rating and $26 target.

OTHER INITIATIONS:

• Hansen Medical (NASDAQ: HNSN) was initiated at JP Morgan(NYSE:JPM), as the firm believes Hansen's Sensei robotic remote catheter navigation system has potential to be a platform technology that could be used in a variety of procedures. The firm also considers Hansen's shares attractive at these levels.

• UBS (NYSE:UBS) initiated Smith Micro Software (NASDAQ: SMSI) with a Buy rating and $18 target; the firm expects Smith Micro to continue to benefit from growth at Verizon Wireless and for the company to continue to further divest its customer base.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).