Even in the most hideous market, there are winners out there despite the turmoil, Cramer said Tuesday. So in order help homegamers spot the winners and avoid the losers, the “Mad Money” host took a look at the attributes of the best performing stocks of the past five years.
The biggest winner is Green Mountain Coffee Roasters , up 3,585 percent in the last five years.
“Green Mountain is all about building a better mousetrap, or in this case, building a better coffee maker, the Keurig single-cup brewing machine,” Cramer said. “It’s very rare that you find something which makes a 10 times change in how people live.”
Baidu comes in at number two, up 1,698 percent over the last five years. While Cramer doesn’t like Chinese stocks, BIDU is the exception. Since Google was kicked out of China, Baidu is the country’s biggest internet search player. And Cramer thinks it is still a “terrific” investment.
The third best performer is Questcor Pharmaceuticals, which is up 1,576 percent in the last five years. This “tiny orphan drug company” produces an expensive medication for multiple sclerosis. The drug is a necessity for the few who use it, and therefore it is covered by insurance.
“That is exactly what we like to look for when we speculate in biotech stocks,” Cramer said. “You have to keep these orphan drug names on your radar screen, companies with treatments for extremely rare conditions.”
Finally, Priceline.com is up 1,475 percent over the last five years. Cramer likes that Priceline gave consumers a new and better way to do something that also saves you money, in this case booking online travel arrangements.
“Even if you don’t believe in the broader market, you can still find individual stocks that are worth owning because they are part of broader themes like wonder drugs and wonder products,” Cramer said. “Not every stock can be a Green Mountain or a Baidu, a Questcor or a Priceline, but if you find just one winner like these, it can outweigh a mountain of losers.”
Call Cramer: 1-800-743-CNBC
Questions for Cramer? firstname.lastname@example.org
Questions, comments, suggestions for the Mad Money website? email@example.com