Cramer's 'Mad Money' Recap: Saks Serendipity

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Jim Cramer celebrated retail turnarounds on his "Mad Money" TV show Wednesday, recommending Saks (SKS Quote).

He said finding a retail revival is like finding a diamond in the rough.

Analysts have been wasting their time recommending Wal-Mart (WMT Quote) when they should have been looking at Saks, Cramer said.

"I've done the impossible: I dug up two legitimate retail turnaround stories," he said.

Saks, the first turnaround Cramer mentioned, is a stock that has the "ultimate aspirational brand," he said. "It's a store with an aura that gets people to spend."

He believes that Saks is a turnaround because of two reasons. The first is because it has good earnings; second, it's an "asset takeout story."

While Wal-Mart just looks like a big warehouse, Saks has the secret ingredient: merchandising. "Merchandising is about perception -- not about statistics. The analysts don't get it," Cramer said.

Saks, on the other hand, has margin expansion and growth. Although its turnaround is still at its infancy, this is the prefect time to buy Saks, said Cramer.

Last year Saks made its shareholders money with its special dividends. Cramer believes that this year the company will make people money with a turnaround.

PetSmart's Paw Up

The second turnaround company Cramer named was PetSmart (PETM Quote), the largest pet store in America.