The "Mad Money" host argued that $52 was still too cheap if the company could sustain the growth it delivered. But since the report, Oracle's stock has declined to just over $49.
"I'd recommend buying Oracle here, as it is a classic 'buy the dip' situation," Cramer said. "But here's the issue with buying forlorn stocks: you don't know when they're going to become less forlorn. You have to buy Oracle here and then maybe pick up some more at lower levels if it gets hit. You have to be willing to do that. I would back up the truck at $46, where it was before it reported."
In other words, Oracle's quarter proved that it is a better company now, at $49, than before it reported, when the stock was just a few dollars lower, but nobody seems to care, Cramer said.
"Why?" he asked. "I've got an answer. Because, again, until today, the stock has been going down since its initial post-earnings spike. It sounds [like] circular reasoning: the stock is going down because nobody cares. They don't care that it's actually getting cheaper. But believe me, now that Oracle's shares are changing direction, it's going to gain adherents as it climbs as quickly as it picked up sellers on the way down."
Cramer said the stock's behavior exhibits a general market pattern. Shares of companies tend to fall out of favor, even after good news, when the larger averages are declining. Then, when investors remember how good the last quarter was, the stock climbs back up.
And Oracle is just one example. Cramer said the same could be said for the stock of Nike, which was met with a similar fate after its quarterly earnings report.
"Notice, I'm not saying you can buy anything that goes down. Plenty of stocks deserve to get hammered, like all the retailers that are being steamrolled by Amazon," Cramer said. "I'm simply saying that if you refine the 'buy the dips' policy into something more rigorous, namely buying the stocks of companies that have gone down in spite of terrific quarters, you'll be in a much better position when the market turns, just like it did today, or the sellers, of course, come to their senses."
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