What do you do when you're looking for a stock bargain, and you're not sure where to start? Jim Cramer has a few tricks up his sleeve.
"If a company shows you that it believes its own stock is cheap, then that can be a pretty good indicator that it might be worth buying," said the "Mad Money" host.
One word: buybacks. This really puts a company to the test and makes them put their money where their mouth is. Sometimes just buying a stock because you know the company will be right alongside you gobbling it up is enough of an indicator that it is worth owning.
"A large enough buyback that's well-executed can propel a stock higher year after year, giving you some pretty fantastic long-term returns," he said.
On Wednesday, Cramer spoke with Dow Chemical CEO Andrew Liveris and learned that it will be increasing its buyback plan by $5 billion. When combined with total repurchase authorization, that brings them to roughly 17 percent of Dow's market.
That's huge and definitely a needle mover in Cramer's opinion. It's also, he thinks, a stock worth biting into.