Mad Money

Cramer: HealthSouth Is a Buy, Buy, Buy

Cramer Gets Bullish on HLS

"In this market, we have to use fear and chaos to our advantage," Cramer said Wednesday.

The "Mad Money" host noted shares of health care providers have been pounded lately on fears the White House and Congressional leaders might come to an agreement on a budget deal that dramatically cuts Medicare spending. Not all health care names are equally vulnerable, though. So Cramer said investors should use the weakness to buy stocks that have been brought down for the wrong reasons, including HealthSouth .

The Birmingham, Ala.-based company is the largest owner and operator of inpatient rehabilitation facilities in the U.S., Cramer said. It provides intensive physical, occupational and speech therapy for those trying to recover from illness or injury. Over the past few months, its stock has taken a 15 percent haircut thanks to Medicare fears because it's a post-acute health care provider and many have been targeted by cuts.

Cramer thinks HLS is a bargain, though. Even though the company gets 70 percent of its revenues from Medicare, Cramer said it's not vulnerable to Medicare cuts because rehab facilities haven't been mentioned in debt ceiling discussions. The rehabilitation business already went through hefty spending cuts, he said. Changes to rehab spending have already been made and furthermore, inpatient rehab only accounts for roughly 1 percent of all Medicare spending. So Cramer said it flies under the radar, making HealthSouth nearly immune to any deficit deal. Nonetheless, HLS is getting grouped in with the rest of the health care stocks, allowing investors to buy this stock at discount.

What's the bottom line? Cramer thinks HLS has pulled back for the wrong reasons. He recommends investors use the confusion about the impact of possible Medicare cuts to buy, buy, buy this stock.

Call Cramer: 1-800-743-CNBC

Questions for Cramer?

Questions, comments, suggestions for the Mad Money website?