Cramer hates broken companies, but he loves broken stocks. There's nothing better than finding a broken stock that's been mistaken for a broken company, he said.
Take The Jones Group , for example. The apparel maker is best known for its Jones New York, Nine West and Easy Spirit, among other brands. Its stock has fallen 31 percent year-to-date. While other retailers hit their 52-week high last week, Cramer noted Jones Group's stock currently a dollar from its 52-week low.
(Slideshow—Cramer: Buy This, Not That)
So what's going on with Jones Group?
One of the reasons the stock got hammered is that Goldman Sachs recently rated it a 'sell,' Cramer said. The firm worried about its exposure to the struggling middle class. Cramer thinks it's a valid concern, but misses a few key points. First, Jones' June results showed it is selling a lot of product. Second, Jones is no longer a mid-tier player. Since having purchased Kurt Geiger, Europe's largest luxury show retailer, Cramer considers Jones a luxury apparel maker.
The Kurt Geiger deal, by the way, made Jones Group 20 percent international. Being as international sales has helped both Phillips-Van Heusen and VF Corp , Cramer is bullish on Jones Group's prospects, too. Kurt Geiger brings a 20 percent growth rate, too. Jones Group had been growing at 9 percent before the merger.
Cramer thinks Jones Group's stock is a steal, given it sells at 7.8 times next year's earnings with a 9 percent long-term growth rate. VF Corp trades at 14 times next year's earning, a much higher multiple even though its growth rate is 9.9 percent.