Top Stories
Top Stories

The 4 defining characteristics of a market winner

Cramer: Three beacons to follow

Sometimes finding the market winners means looking no further than what it is telling you to buy. One secret to Jim Cramer's success over the years is being able to figure out what is driving things. Once you know what caused all the action, then you have a real recipe for success.

Three stocks caught the attention of Cramer's eye, and were also among the best performers of the market on Thursday. The "Mad Money" host thinks investors should take another look at Snap-On Tools, Domino's Pizza and Skechers.

"What do they all have in common? How about four characteristics that define what wins in this market," Cramer said.

These winning stocks may not appear that they have anything in common at first. One sells pizza, another sells shoes and the other sells tools. What the heck could they all share?

There are four attributes that define a winner, and Cramer sees all of these characteristics in these companies.

Domino's in Jersey City, New Jersey
Craig Warga | Bloomberg | Getty Images

First, they have huge sales and earnings power. Domino's just posted 19 percent earnings growth; along with 14 percent same store sales in the U.S. Wowzer!

Cramer was absolutely stunned when he saw the same store sales growth figure. Wall Street was only expecting approximately 7 percent, and they blew it out of the water.

Likewise, Snap-On delivered 16 percent earnings growth and Skechers posted an amazing 40 percent sales growth number. Its earnings increased a stunning 80 percent year over year. Cramer was amazed.

The second attribute of a winner is the surprise factor. The good ones always find a way to come through. Cramer thought for sure that Snap-On would have yet another consistent delivery this quarter and was completely surprised by its amazing sales and organic growth—all from selling tools!

He was also shocked by the same-store sales numbers from Domino's, and the jaw-dropping growth from Skechers that had an increase in operating margin of 270 basis points.

"That means they're making a heck of a lot more money per shoe than they did last year. I don't know if I can recall another apparel company putting up that kind of year-over-year improvement," Cramer added.

The third ingredient to a successful stock in this kind of a market is an insane amount of innovation. Cramer even dares to argue that all three companies are actually technology stocks in disguise. Snap-On takes the time to listen to its clients, and then delivers with new tool inventions to meet their needs.

Domino's took technology innovation by storm, as it was among the first to embrace online apps that allow customers to order from their phones. It also understood the importance of social media as a way to win over customers.

Read more from Mad Money with Jim Cramer
Cramer: No search needed! Web winner
Cramer: Will Chipotle sizzle again?
Cramer: Stocks ready for big turnaround

Skechers has also been an innovation machine, cranking out all sorts of new shoes that cover every occasion for every age. It also embraces social media as platforms to expose new innovations, even having the popular singer Demi Lovato promote its products on YouTube.

The fourth characteristic of a top stock is the lack of excuses. All three companies have franchises overseas. Have you heard them complaining about the strong dollar or lack of demand overseas?

"If you have the right goods, the strong dollar can't derail you. That, in itself, may be the most amazing thing about these three companies."

Questions for Cramer?
Call Cramer: 1-800-743-CNBC

Want to take a deep dive into Cramer's world? Hit him up!
Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram - Vine

Questions, comments, suggestions for the "Mad Money" website?