Mad Money

Cramer: Amazing world chaos-resistant stocks

Biotech immune to market madness?
Biotech immune to market madness?

After a hideous day on the markets on Monday, Jim Cramer reminded investors that this is a true demonstration of just how fragile the market really is. Somehow, the financial problems of a country that is the size of Louisiana managed to crush the averages.

It seems to Cramer that Greece will ultimately default on its debt and leave the euro, causing the entire global economy to feel as though it is in chaos. What the heck should investors do?

"I say you buy some very special biotechs that have refused to come down until now. That's right, I think you use this marketwide selloff as an opportunity to pick up the speculative development stage biotech names that haven't had a price break in ages," the "Mad Money" host said.

Why speculative biotechs?

Because these are red hot stocks that don't typically come down, unless there is a marketwide selloff like the one that happened on Monday.

"I suspect that there are going to be some big declines here, and I think I have the ones that will bounce back the hardest when all the weak hands fold," Cramer said. (Tweet This)

Pedro Castellano | Getty Images

Cramer also considers the biotech group to represent safety, because most biotech companies are immune to global economic chaos. Meaning, regardless of what happens in there will always be the same number of people who will have chronic medical needs and need treatment.

Additionally, this group is attractive to Cramer because the big drug companies have been gobbling up the smaller biotechs left and right because their patent cliffs are so bad. So, the larger companies are about to lose their patents on some of their biggest drugs and need to buy the pipeline of smaller biotechs in order to gain growth.

Cramer's three favorites of the group are Receptos, Radius Health and Alder Biopharmaceuticals. All three of these speculative growth biotechs have the ability to drive their stocks higher, regardless of the economic environment.

First up is Alder Biophmarmaceuticals, which develops antibody-based therapies. It has a pipeline of promising drugs, including an early-stage formulation for Cushing's disease. Cramer also views this company has being a prime takeover candidate for Allergan. Once it comes down further in the selloff, Cramer recommends pulling the trigger on this one.

Next up is Receptos, which is also a developmental stage biotech that is focused on immunology. Cramer loves this stock for its pipeline product that could be a blockbuster that delivers on multiple diseases.

Considering that Receptos is a $5.5 billion company with a drug that could possibly deliver $5 billion in sales annually, Cramer thinks this is a legitimate speculation. He also loves the stock even more after its pullback on Monday.

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Finally, there is Radius Health, which develops treatments for osteoporosis and other endocrine mediated disorders. Earlier in the month, it announced positive data concerning its lead osteoporosis formulation. As long as this drug gets the thumbs up from the FDA, Cramer is on board with this stock.

So, while everyone else is freaking out about Greece, Cramer found opportunities in high-quality biotech companies that are immune to the global economic chaos.

"None of these will be hurt by Greece and all three have catalysts that could push their stocks higher in the second half of the year, even as I expect them to keep taking a tumble along with the rest of the market right now," Cramer added.

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