IDEXX for Defense

Cramer was right when he said yesterday’s rally was a fluke. But traders abandoned their defensive stocks for tech and industrials in hopes that IBM’s better-than-expected quarter meant the market was turning up. Then Tuesday brought a weak retail-sales report and a horrible quarter from Citigroup , sinking the Dow 277 points.

Make no mistake, Cramer said during Mad Money, “it’s a bear market, and our only concern is to protect the money we have.”

So Homegamers need to get defensive. That’s why Cramer favors stocks like IDEXX Labs. It offers both high growth and protection against what he called “the Fed’s war on America.” The proof: This pet diagnostics company was up about a dollar Tuesday while the rest of the market was down.

Medical testing for animals has one distinct advantage over that of humans: Insurance companies don’t hold sway over pricing when it comes to pets, so the industry’s dominant companies can make a fortune, Cramer said.

And there are catalysts for this stock, too, which should send the it higher. IDEXX has two new products coming out this year, and apparently there’s already strong demand.

The Westbrook, Maine-based company also has the buyback Cramer loves so much. With $1.5 million left, the repurchase of 5% of IDEXX’s shares outstanding should lend a nice cushion to the stock in times of trouble.

Sure, the stock’s expensive trading at 33 times next year’s earnings with a 15% growth rate. But IDEXX is down from its recent highs, and Cramer expects an increase in earnings estimates. Plus, in an environment like this one, this stock deserves the premium, he said. His only word of caution: Wait for a pullback before you buy.

Questions for Cramer?

Questions, comments, suggestions for the Mad Money website?