Not long ago, hospital stocks like HCA Healthcare Inc. fell out of favor with investors amid the Trump administration's push to dismantle Obamacare and news of the health-care venture between Amazon, Berkshire Hathaway and J.P. Morgan's chieftains.
But lately, most of the group has been rallying, with the exception of Tenet, which slid nearly 16 percent after its Tuesday earnings report. But for Cramer, Tenet's issue was company-specific, and the rest of the group was worth inspecting.
"Clearly, the hospital space is sexier than most of us thought," he said, pointing to HCA as the best stock in the group.
He attributed HCA's outperformance to a few factors: "you've got an improving economy that makes patients feel more comfortable about going to the hospital when they get hurt, and at the same time, HCA's got a terrific geographic footprint in many fast-growing cities, as I mentioned, especially down South, where the economy … is just booming."
And even after its run, HCA's stock still looked cheap to Cramer, trading at 13 times next year's earnings estimates despite its strong balance sheet.
His conclusion on the space? "Judging by the way Tenet imploded today, you need to stay selective, which is why I want you to stick with best-of-breed HCA Healthcare," Cramer said. "If you want exposure to the health care sector, this one is a must-own."