"To navigate our way through this volatile and at times treacherous market, the trick is to find stocks that offer good risk-reward," Cramer said Wednesday. "Names where the upside outweighs the potential downside."
Consider Edwards Lifesciences , for example. The Irvine, Calif.-based company makes products and technologies designed to treat advanced cardiovascular disease. It makes heart valves and hemodynamic monitoring technologies that are used to measure a patient's heart function in surgical and intensive care settings. Cramer had long been interested in the stock, but thought it to be too expensive. Over the past month, though, the stock got hammered as the whole market got banged down, giving investors a great opportunity to buy the health care name at discount.
EW has a major catalyst coming in October when the U.S. Food and Drug Administration will decide whether it will approve Edwards' Sapien aortic valve, Cramer noted. Edwards' device offers a less invasive way of replacing a heart valve, a procedure which currently takes a long time to recover from and can cause complications simply because it's so traumatic.
FDA approval of the Sapien device would be huge for EW, Cramer said. He's confident it will win approval because the FDA already approved it in a 9-0 decision on July 20. Besides, this device has been used in Europe for years.
Sapien is not Edwards' only product either. Edwards is the market leader in heart valves and hemodynamic monitoring products that are sold around the world, Cramer said. It has more products coming down the pipe and established great brand recognition long ago.
The stock currently sells for 24 times next year's earnings estimates with a 25 percent long-term growth rate, Cramer said. Not only does he think it's incredibly cheap for a fast-growing medical devices company, he called it the "definition of good risk-reward." After all, he noted the recent decline means that the potential upside far outweighs the possible downside.
Cramer recommends investors start legging into a position at current levels. For those worried about the risk, he suggests buying the November 65 call options for roughly $5, which allows one to capture the upside of the FDA decision in October while being stopped out below $65.
Call Cramer: 1-800-743-CNBC
Questions for Cramer?
Questions, comments, suggestions for the Mad Money website? email@example.com