Cramer's 'Mad Money' Recap: When Broken Stocks Get Fixed

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"How does a broken stock let you know it's been fixed?" Jim Cramer asked viewers of his "Mad Money" TV show Tuesday.

Simple: Before investors get back on board a stock, they want the broken company to do something drastic, which shows that management has finally "gotten religion" and understands that profits mean more than anything else, he said.

On Monday, Viacom (VIAB Quote) did just that and gave market players what they wanted, Cramer said. The company announced that it is cutting 250 jobs at MTV.

Personally, Cramer feels bad that people have lost their jobs at MTV, but this is business, where layoffs are a good thing, he said. Now he's going bullish on Viacom.

Media companies are all the same, Cramer explained. He reminded viewers about how he got bullish on Time Warner (TWX Quote) when it decided to sell off 18 of its magazines.

"Since Time Warner made its ritual sacrifice," it has gone up, he said, and changed from "Time Goner" back to Time Warner.

Viacom has been run like a growth company even after its growth ran out, Cramer continued. "It became a victim of its own success" as it maxed out its younger demographic. Now it needs to stop worrying about growth and focus on profits, he said.

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