With the major averages roaring back Thursday on better-than-expected trade data out of China, investors should gradually begin buying quality stocks, CNBC's Jim Cramer said.
"China appears to be behaving itself," Cramer said on "Mad Money." "It's time to go shopping for high quality stocks while you can still get them at a bit of a discount versus where they were trading a week ago."
"Both IPOs spiked right out of the gate, but once the market got hammered they came right back down. In other words, you're getting a second bite at the apple," Cramer said.
Cramer highlighted the companies:
Livongo Health, which uses smart devices to help people with chronic illnesses manage their conditions, saw its total client enrollment surge to 140% in the most recent quarter, Cramer said. That translated into 157% revenue growth in the latest quarter, up from 122% last year.
The company spiked from $28 per share to about $40 per when it went public in late July. However, it peaked at $45.68 a week ago thanks in part to the recent market sell off.
"Even here, the stock isn't cheap, selling for 9 times next year's sales estimates, but given that it's growing at a 100% plus clip, I think that's a justifiable valuation," Cramer said.
Health Catalyst, a cloud-based analytics software company that serves health-care providers, has "fabulous financials," Cramer said. The company racked up 54% revenue growth last year, which accelerated to 70% in the first quarter of this year.
The company priced its IPO at at $26 and then opened up on the stock market in late July at $37.50 a share. The following week, Health Catalyst surged to just under $46 but then got hammered during the recent sell off.
"At these levels, the valuation is practically sane. Health Catalyst trades at less than six times next year's sales, using my back of the envelope calculations. That's pretty reasonable for a company with 50% plus revenue growth," he said.