Cramer’s unlocking value amid a bear market

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It is no secret that Jim Cramer is not bullish on the market right now. In fact, regular viewers know that he continues to describe the market as pure "treachery." But Cramer doesn't think that means investors should just throw in the towel, sell everything and stop searching for opportunities.

Rather, the "Mad Money" host thinks that investors may need to narrow the perimeters of their search as some of these stocks getting pounded are extremely high quality and are absolutely worth buying into in weakness.

"I think we are in a treacherous moment where caution will be rewarded," he said.

Historically, the plummeting price of crude oil is good news for restaurant stocks. Every dollar that people do not spend at the gas pump is redirected to lunch and dinner. Even the declining price of staple crops like wheat and corn are a good thing for restaurants, as they can boost their margins and save on costs.

But since Cramer thinks this is a treacherous market, he doesn't want investors to put all of their eggs in one basket with restaurant stocks. So what should we look for?

Investors need a company that has an ace up its sleeve and the potential to instantly unlock value for shareholders. Cramer recommends looking for a restaurant play that can break itself up and make shareholders money in the process.

Two years ago, in June 2012, Cramer recommended one of his long-time favorite stocks—Jack in the Box. The fast-food operator runs two concepts: Jack in the Box, a large hamburger chain with 2,250 locations across 21 states, and Qdoba Mexican Grill, a Mexican inspired fast-casual chain with more than 600 locations reaching 47 states.

Cramer knows Jack in the Box very well. When he recommended the stock in 2012 it was trading at $27, and is now at $66. Then two months ago, he circled back to it as a stock worth buying because of how mainstream Mexican food has become, and now it has had an 11% run since that time.

Cramer thinks he should be taken seriously when he says that Jack in the Box has a lot going for it, and could have a tremendous upside if management breaks up the business. He thinks Qdoba could go much higher in valuation if it were spun off as a separate publicly traded company, much like in 2006 when McDonald's spun off Chipotle.

He is not saying that Qdoba will be the next Chipotle, rather "what I do believe is that Jack in the Box is a company where the whole is currently worth less than the sum of its parts, and separating those parts would generate some terrific gains"

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Jack in the Box has gone through a major multiyear refranchising effort with its new brand. It recently sold off stores to franchisees, going from 25 percent franchised before the great recession to 80 percent franchised. That created more stable cash flows and greater visibility. Since, January the company has bought back $277 million worth of stock, which totals 10 percent of its current market capitalization. It even started paying a dividend over the summer, yielding 1.2 percent currently.

Cramer thinks these are all great signs that management believes the stock is too cheap and has a ton of confidence in the future.

With these statistics, Cramer thinks the valuations aren't being reflected in Jack in the Box's current market price, which is why a breakup makes so much sense. It could even be worth $85 a share after the breakup, which is 26 percent higher than where it currently trades. And that is Cramer's conservative forecast.

"Memo to Jack in the Box, you can unlock a tremendous amount of value if you simply break up your business—I don't care if you sell Qdoba, or merely spin off a minority stake in the chain via IPO, either way you'll be doing your shareholders a favor," Cramer added.

Even without the breakup, he still thinks this stock is worth buying into the weakness that has overcome the market, and despite the decrease in oil prices.

Call Cramer: 1-800-743-CNBC

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