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The New Indestructibles

Here’s a point that Cramer is always trying to drive home: Buy supermarket and drugstore stocks after a panic-fueled sell-off like the one that happened yesterday. Traders view them as safe, so market fears tend these stocks higher as investors pour money into them, he said.

Usually, Cramer would recommend Coca-Cola or Altria , but there are two newcomers on the scene he wanted homegamers to know about. And what’s interesting is that the CEOs of both companies used to be in Cramer’s Hall of Shame. But Andrea Jung of Avon and Donald Knauss of Clorox have turned their firms around, and now these stocks are delivering.

Both Avon and Clorox are working overseas markets. As the middle class grows in Russia, China and Latin America, Avon sees an increase in sales. After all, Cramer said, the first thing a person does when they start to make a little money is doll themselves up. Jung’s strategies of removing inactive product reps in China and focusing spending on what works in markets like Mexico have streamlined Avon.

Clorox’s acquisitions in Latin American bleach, laundry and cleaning businesses helped fuel this past quarter’s beat. Even after reporting a disappointing quarter in July, Clorox came back and outperformed consensus earnings by 14 cents a share.

Both Avon and Clorox have significant buybacks going as well. Avon’s is huge, actually: $2 billion worth over five years. Back in August, Clorox bought back $750 million, or about 10% of the shares outstanding.

Individually, there are a couple of points about these companies. Avon’s key metric, Cramer said, is the operating margins, which jumped 33% thanks to Jung’s leadership. This goes back to that focused spending – they spend less and get better results.

Clorox just made a great acquisition when it picked Burt’s Bees, a natural personal care company. The company won’t start adding to Clorox’s earnings until 2009, but Cramer thinks it will be big when it comes.

Cramer called Avon and Clorox the “new indestructibles.” Now, homegamers can get them on discount thanks to yesterday’s sell-off.

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