Cramer's 'Mad Money' Recap: July 8

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"We've got some new market leaders," Jim Cramer told viewers of his "Mad Money" TV show Tuesday. "The drug and health care stocks that were so hated just one week ago were the ones up today."

Cramer said the safest and most consistent group in a market of high energy prices, high raw costs and a slowing economy is healthcare. He said the health care stocks are worth owning, as the big money managers move their money into these recession-proof names.

Cramer cited the AMEX Pharmaceutical index, which fell to a low of 283 recently from 355 but has since rebounded, as one indicator of the groups recent strength.

Within the health care group, Cramer recommended Smith & Nephew (SNN Quote) as his favorite. The company reported a disappointing first quarter that caused shares to fall 11% from $64.53 to just $57.40 on May 1. Cramer called today's price of just over $52 a share an opportunity to own a great stock at a much too low price.

Smith & Nephew has a diversified portfolio of health care businesses. It gets 37% of its revenues from orthopedic reconstruction and it has a orthopedic trauma, endoscopy, and advanced wound care business as well. Cramer said all of its businesses are good and stable.

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