Cramer's 'Mad Money' Recap: Parboiled Bear

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If you take a look at the military's big, new budget, you'll find Jim Cramer's two defense department picks, he told his "Mad Money" TV show viewers on Wednesday.

En route to his bull market, Cramer cooked up a big bear souffle.

He likes Edo(EDO Quote) and Axsys Technologies(AXYS Quote), which he said are not your run-of-the-mill defense contractors.

"They're not Lockheed Martin(LMT Quote) and Northrop Grumman(NOC Quote)," he said, because they specialize in "future combat systems."

While the military budget might look bloated to some, it doesn't automatically guarantee a bull market in all defense stocks, Cramer said. Instead, the money will go to those companies that can beef up our existing military system.

Cramer believes that Edo, which makes unmanned aircraft, is a company that will be tapped to enhance military performance. It also makes high-tech equipment for missiles and the V-22 Osprey, which can function as a helicopter and as a plane.

The company's revenue has risen 40% since 1999, he added, and Wall Street is always looking for this kind of accelerated revenue growth.

Axsys is a nano-positioning stock, Cramer said, meaning that it makes thermal-imaging devices and really powerful precision-optical components.

These companies are making money now, and they will make more money in the future, he said.

Speculation Day

Today is a speculation day, Cramer told viewers, adding that he loves to speculate on cheap stocks when they're not cheap companies.

You don't need to buy a call to get some serious leverage on these stocks because they're so volatile that they can make some money very quickly, he said, adding that his last $2 miracles, JDSU(JDSU Quote) and Conexant(CNXT Quote), made people who played them correctly some mad money.

The battered stock of the day that's making a comeback is Vitesse Semiconductor(VTSS Quote), said Cramer, adding that it has great pin action off the upbeat Cisco(CSCO Quote) quarter.