Cramer: We are in a new era. Take advantage

Cramer: We are in a new era. Take advantage   

There is a brand new pattern occurring with stocks these days, and Jim Cramer wants investors to take advantage. This is a new era where down doesn't necessarily mean out when it comes to earnings.

"This is an era where we forgive and forget, and then take advantage of changes that management has made that are working," the "Mad Money" host said.

Urban Outfitters soared 16 percent on Tuesday simply because when it reported, it wasn't as bad as many thought it would be. Urban expanded its format to transform into more of a home goods store. At the same time, it offered more merchandise for intimates, accessories, footwear and beauty.





A shopper exits an Urban Outfitters Inc. store in New York, U.S.
Michael Nagle | Bloomberg | Getty Images
A shopper exits an Urban Outfitters Inc. store in New York, U.S.
"This is an era where we forgive and forget, and then take advantage of changes that management has made that are working." -Jim Cramer

In other words, it adjusted to what the consumer wanted and is doing substantially better than expected. This was a similar dynamic to what Cramer saw from J.C. Penney, which said on its conference call that categories such as handbags, footwear and Sephora all outperformed.

While it is still a bit early in the trend, Cramer suspects that the reason why investors are suddenly embracing these beaten-down names is because there is a large gap between the stocks of the haves and the have-nots — not necessarily the companies themselves.

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Cramer was also mystified when Whole Foods didn't jump after it reported the last quarter, but that all changed in the past 48 hours.

"The guys at Whole Foods clearly believe that their stock deserves to go higher, and I can't say I disagree with them," Cramer said.

He thinks the stock is a buy at current levels, given the fact that it is only at the levels where he expected it to be after it reported its first good quarter in ages just four weeks ago.

Management at these companies has finally figured out that the old ways of achieving success were not working, and they have finally pivoted their approach.

"Urban Outfitters, J.C. Penney and Whole Foods remind us that nothing is static in this market, and smart changes will be rewarded with higher share prices, just as they should be," Cramer said.

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