Safe Speculation?

To stay interested in stocks despite this "volatile and vicious market," Cramer said Friday, investors should try a little speculation.

"It’s absolutely vital to own at least one super-risky stock with the potential to deliver super-high rewards to keep you interested," he explained. "When you’re engaged, when you know what you own, then you’re probably not going to panic and sell at the worst possible time."

When done wisely, speculation doesn't have to be "dangerous," Cramer said. Take Cognex , for example, which is a $20 stock with a market capitalization of just $830 million. The company has a "huge cash hoard" of more than $5 per share and pays a dividend that yields 1.15 percent. In this environment, a meager dividend is attractive because it provides protection from the downside. And they scare away short sellers, who would be responsible for paying those dividends when the time came.

Cognex, based in Natick, Mass., makes machine-vision products that capture and analyze information to automate tasks, like manufacturing jobs. Their technology is used in a variety of industries, including automobiles, life sciences, pharmaceuticals and more, and the business is "on fire," Cramer said. Last month, it reported a "monster" second quarter, with earnings coming in at 38 cents a share and beating the 22 cents that Wall Street had expected. Revenues were also stronger than anticipated, and the company increased its guidance for the third-quarter. Gross margins also improved to the highest level in five years.

Cognex's three divisions were firing on all cylinders. Its largest segment, factory automation, represents up to 70 percent of total sales, Cramer said, and customer demand was at its highest level ever. Orders were also at record levels for its surface-inspection segment, which sells to industries that produce materials in a continuous process. Think metals or paper.

Cramer thinks Cognex's growth has "only just begun." The company is growing its core businesses while introducing new products and expanding to emerging markets around the world, including Brazil, China, India and Mexico. Thirty-six percent of its sales come from the Americas, while Europe accounts for 30 percent, Japan 20 percent and the rest of Asia 14 percent. Cramer said the company hasn't seen a slowdown in Europe, and revenues there actually rose by 46 percent year-over-year and by 22 percent from the previous quarter.

Although just two points off its 52-week high, Cramer thinks Cognex is cheap. Back out the company’s $5 of cash per share, and the stock is trading at a mere 12.5 times next year's earnings estimates. It is "especially inexpensive," he said, when you consider the company could grow earnings by up to 28 percent next year.

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