×

Cramer Remix: Safest cybersecurity play out there

Jim Cramer watched as the hatred of drug stocks has become so strong on Tuesday that it finally brought down the entire market. Now the question remains, will the sickness of the drug group that is infecting other stocks ever get better?

"There are many sectors that matter to a market, sectors that can take down everything if their declines are violent enough," the "Mad Money" host said.

The brutal market sell-off that began back in August has not only hit the biotech stocks; it has also created some of the worst carnage out there in the cybersecurity group.

This group was once one of the sexiest plays out there and has gone downhill in record time with the PureFunds ISE cybersecurity ETF down 24 percent from its late-June all-time highs. And even as several individual cybersecurity names have fallen even further, Cramer wonders if they have now hit levels so low that it could be time for investors to circle back to the group to pick up some discounts.

"That's right, at these levels I think it is possible that the once high-flying cybersecurity stocks might actually represent value, even as they are still fairly expensive on an earnings basis," Cramer said.

Cramer considers Palo Alto Networks to be the gold standard, but for a higher-risk/higher-reward play, he blessed FireEye and CyberArk, but only as long-term volatile plays. He recommended using a deep-in-the-money call option strategy with these stocks to curb the downside and magnify the upside.

However, for a cybersecurity play that is truly safe, Cramer is sticking with Cisco.

Biotech
Cultura Science | Rafe Swan | Getty Images
"This kind of selling is way overdone, and it smacks of wholesale liquidation of anything that has higher growth than other cohorts" -Jim Cramer

In Cramer's perspective, this sickness in the biotech group is a lesson to investors that one of the great leaders of this period, medicine and biotech, can behave just as badly as oil stocks sometimes. Even worse, the illness in the biotech group is no longer restricted to just high growth members of the group.

"In short, biotech has become a pariah, and it is infecting everything," Cramer said. (Tweet this)

Many of the drugs that cost a lot of money are called orphan drugs. They are created for a small group of people suffering from rare diseases. However, these medications are often alternatives to either death, or an extremely expensive lifetime maintenance that would be far more expensive than these high priced drugs.

So, is the era of high priced drugs over? At this point, Cramer thinks the downdraft of biotechs that are crushing companies not related to high drug prices is getting a little absurd.

"This kind of selling is way overdone, and it smacks of wholesale liquidation of anything that has higher growth than other cohorts," Cramer said.

Ultimately, Cramer says that the biotech infection is just a localized infection and nothing more. That doesn't mean it won't do damage, because it can. However, it also does not mean investors won't make money if they start buying health-care stocks now.

Read MoreCramer: Biotech infecting the market—Will it stop?

One company that has been hit hard in the biotech wrath, even though it has nothing to do with drug prices, is the health-care company Premier.

Premier is a company that allows doctors and hospitals to save money on medical supplies, while also promising to help them to improve the quality of their care and produce better patient outcomes. Premier serves more than 3,600 hospitals and 120,000 alternative care sites in the U.S.

The company also has a data analytics business to help customers make cost and quality improvements. It also basically uses the collective purchasing power of its clients to help get drugs and supplies at cheaper prices. In fact, Cramer thinks it could actually benefit politicians in Washington by forcing down the cost of high-priced drugs.

So, why the heck did the stock sink on Tuesday? To learn more, Cramer spoke with Premier CEO Susan DeVore.

"We actually try to create competitive friction between companies so they drive the price down. We actually have $44 billion of spend that runs through our purchasing organization. And what we are able to do uniquely is bring clinical information together with pricing information to really figure out what is appropriate," DeVore said.


Visitors take pictures next to the Intel logo outside of the Intel headquarters in Santa Clara, Calif.
Getty Images
Visitors take pictures next to the Intel logo outside of the Intel headquarters in Santa Clara, Calif.

Sometimes Cramer can only explain a stock's performance with numbers. It all comes down to the numbers—it's as simple as that.

PepsiCo, led by Indra Nooyi, delivered spectacular numbers Tuesday morning. Meanwhile, Ellen Kullman at DuPont produced hideous results on Monday night.

The result? Kullman is out, and Nooyi is now considered a best-in-class CEO in the entire consumer packaged goods sector.

"Sure, DuPont is a chemical company and PepsiCo sells snacks and sodas, but they do have one big thing in common, and on that front, the contrast couldn't be more stark. That's because Trian Partners, the activist fund run by Nelson Peltz, tried to effect change at both companies," the "Mad Money" host said.

In the end, Cramer thinks Nooyi won because she puts up better numbers, and Kullman lost because she didn't. However, he does wonder if Kullman hadn't been so stubborn in fighting Peltz, could there have been a better outcome for both her and DuPont shareholders?

Read More Cramer: Listen up, DuPont! What Pepsi did right

Just as the highest growth stocks in the market started to roll over, Cramer was surprised to see that one of the slowest growing sectors out there has started to flying. Believe it or not, the old tech stocks are making a comeback.

"After weeks of turmoil, we can not only spot the stocks that money is flying out of, we can also see the areas where money is flowing in, and old tech has been providing new but uncertain leadership in this tumultuous period," the "Mad Money" host said. (Tweet this)

But is this real, or are the old tech stocks back for the long term?

To find out, Cramer turned to Bob Lang, a technician and founder and senior strategist at ExplosiveOptions.net and colleague of Cramer's at RealMoney.com.

Lang agreed with Cramer that some of the boring, old-line tech names are now suddenly rising from the ashes. Two of the bigger names that Lang liked are Intel and Microsoft, the two best performers of the Dow Jones Industrial average since the market collapse on Aug. 24.

So, if the market gets another big downdraft, Lang's charts show both Intel and Microsoft can keep roaring. These are exactly the kind of stocks to buy on that downdraft, or even if there isn't.

Read More Cramer: Hot money flowing into this unusual group

In the Lightning Round, Cramer gave his take on a few caller- favorite stocks:

Linn Energy: "They just suspended their distribution, so sell sell sell."

Teladoc Inc: "Teladoc kind of lost that contract after they were on, so that was uninspiring and suboptimal. So, I think you have to keep doing some work on that one."

Read MoreLightning Round: The chart is terrible, but I still like it