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Jim Cramer's 'Mad Money' Recap: Next Week's Game Plan

Why Microsoft? Cramer said because the markets hate high growth at the moment, and Microsoft is a safe, low-growth, low-PE name with a new CEO and new "cloud and mobile first" strategy that seems to be in fashion. Microsoft also affords investors a dividend cushion of safety on big down days like Friday.

The polar opposite of Microsoft is Twitter, a cool, hip company with no dividend and no earnings either. Twitter is insanely expensive, Cramer said, which is why the pain in this stock, as well as the many other high-fliers, is not over yet.

So if investors are looking for the keys to the market, Cramer concluded Microsoft and Twitter currently embody the yin and yang of investor sentiment.

Best for Your Buck Finale

For the final installment of his "Best For Your Buck" series, Cramer offered his pick for the best stock with a share price less than $10. That stock is drugstore chain Rite-Aid (RAD - Get Report).

Cramer explained that shares of Rite-Aid are up 30% so far this year and have nearly doubled since he featured the stock in August of last year. The company just reported a two-cents-a-share earnings beat with better-than-expected revenue.

While this stock was all but left for dead last year, Cramer said this year the company has many tailwinds including the Affordable Care Act, which has created 14 million potential new customers with insurance. The U.S. population continues to trend older, he continued, and many brand-name drugs are coming off-patent, helping to boost Rite-Aid's margins.

But all those trends benefit all drugstores, Cramer said. Specific to Rite-Aid is the company's new store format, which now accounts for a quarter of its locations, as well as an uptick in flu shots, which helps get customers into those locations.

Trading at just 15 times earnings, less than its peers, Cramer said it's easy to see why this is the stock to own at this price point.

Cramer's Playbook

In his "Cramer's Playbook" segment, Cramer answered the question of what price-earnings, or P/E, ratio investors should be looking for in the stocks they buy.

Cramer said that investors should never just consider a stock's share price when making an investment decision. He said the P/E ratio, which is the share price divided by a company's expected earnings, is a much better metric to use.

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RAD $7.84 -0.57%
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