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Digging Deep for Deals: Part 2

Friday, 27 Jul 2007 | 7:46 PM ET

The only thing better than a stock that just beat the Street and was put on sale by the downturn is one that also follows the $80-to-$120 rule, Cramer said.

Aftermath Homework (pt.2)
Mad Money host Jim Cramer sifts through the market rubble.

For Home Gamers that don’t remember the rule, it goes like this: Stocks in a bull market that make it to $80, usually head to $100. Stocks that make it to par have a tendency to then push on to $120.

Boeing and Lockheed Martin, which are hovering near $100, should be the next stocks to move, Cramer said.

Boeing is down two points despite reporting a strong quarter on Tuesday. That’s a great opportunity to get in on a stock Cramer thinks should climb 15 points on the strength of the 787 Dreamliner alone. The company said it doesn’t see an end to the demand for its energy-efficient planes, and neither does Cramer.

Lockheed is “irresistible” now that it’s down seven points, even after blowing away the numbers on Tuesday, Cramer said. LMT is leveraged to the Air Force, which is constantly replenishing its fleet, and countries around the world are clamoring for an older plane, the F-16. The building of the newer F-22 should be underway by August, and that’s another reason Cramer thinks the growth is just waiting to happen.

Lockheed is also a buyback play. Cramer thinks they’re buying heavily any time the stock gets near $100 so it won’t drop below that price. How’s that for a shareholder-friendly company?

Bottom Line: Cramer only wants the highest-quality stocks when he searches through the rubble after a major sell-off. Boeing and Lockheed Martin are both top notch. They are $80-to-$120 names that already beat earnings and stocks Cramer thinks Home Gamers could make some mad money.

Questions for Cramer? madmoney@cnbc.com

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