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NEW YORK (TheStreet) -- Conventional wisdom says you just can't make money in individual stocks anymore, Jim Cramer said on Mad Money  Wednesday. But does that mean investors should just invest in the averages and settle for average results? Absolutely not.

Why own the entire S&P 500 index when you can own the best stocks in each sector? Cramer asked. Today Pepsico (PEP) - Get PepsiCo, Inc. Report, led by the "bankable" Indra Nooyi, reported a fabulous quarter and guided estimates higher. Cramer said it wasn't that hard to see Pepsico was among the winners in the consumer packaged-goods space.

Then there's the speculative Puma Biotechnology (PBYI) - Get Puma Biotechnology, Inc. Report, a stock that jumped a stunning 295% in today's session after the company's breast cancer drug showed positive results. Cramer admitted that many investors may have never heard of Puma, but with a little homework they might have come across this long-shot therapy and been able to profit from it.

The winners in the market are out there, and they're not that hard to find, Cramer said. That's why investors should never settle for exchange-traded funds and index funds that just follow the averages. After all, who wants to be just average?

Next-Gen Biotechs

Is the next generation of biotech stocks outpacing the old-school big pharma names? Cramer said that appears to be the case -- Cramer's "four horsemen" of Celgene (CELG) - Get Celgene Corporation Report, Gilead Sciences (GILD) - Get Gilead Sciences, Inc. (GILD) Report, Regeneron (REGN) - Get Regeneron Pharmaceuticals, Inc. Report and Biogen Idec (BIIB) - Get Biogen Inc. Report all posted strong gains, while the old-school GlaxoSmithKlein (GSK) - Get GlaxoSmithKline plc Sponsored ADR Report appears to be withering before our eyes.

Cramer said it's clear that sales are dwindling at Glaxo as the competition from cheaper, generic alternatives continues to grow. The company was even forced to halt its share buyback program amid the weakness. While a few years ago Glaxo might have been able to buy one of the four new market leaders, today their market caps have grown while Glaxo's has shrunk to a point where an acquisition is out of the question.

The times are indeed changing, Cramer concluded, and his four horsemen are pulling further ahead of the pack.

Executive Decision: Jack Hartung

For his "Executive Decision" segment, Cramer spoke with Jack Hartung, CFO of Chipotle Mexican Grill (CMG) - Get Chipotle Mexican Grill, Inc. Report, the restaurant chain that blew away the estimates with a 41-cents-a-share earnings beat on a 17% rise in same-store sales, the best the company's seen in over eight years. Shares of Chipotle are up 21% since Cramer last checked in with Hartung in February.

Hartung said consumers are indeed becoming more curious as to where their food comes from and are more discerning about what they eat. He said it's a slow and subtle shift, but it's happening.

When asked about the signs at some Chipotle locations alerting customers to a shortage of grass-fed beef, Hartung said Chipotle supports U.S. ranchers but there simply isn't enough U.S. grass-fed beef to support their needs. While supplies are being supplemented by Australian-raised beef, Hartung said customers have been very understanding and appreciate the signs alerting them of the issue.

Turning to the issue of throughput at Chipotle stores, Hartung said that getting eight more people an hour through the line may not seem like a lot, but everyone likes faster service and shorter lines, which is what the company has been able to deliver. It's not just about speed, hovever. Hartung said Chipotle teams are still delivering intense customer focus and communication, all of which makes for a great experience.

Finally, when asked about possible splitting the stock, which now trades well over $600 a share, Hartung said it's not something this company is exploring at the moment.

Cramer said sometimes you need to pay over $600 for a great stock and Chipotle is one of those stocks.

Executive Decision: Moshe Gavrielov

In his second "Executive Decision" segment, Cramer spoke with Moshe Gavrielov, president and CEO of Xilinx (XLNX) - Get Xilinx, Inc. (XLNX) Report, a stock Cramer owns for his charitable trust, Action Alerts PLUS. Shares of Xilinx fell sharply today, down 14%, on a significant shortfall in earnings and subsequent analyst downgrades.

Cramer pressed hard for answers regarding the company's statements in May that indicated sales were strong compared to the rapid deterioration of those sales over the past 60 days. Gavrielov said he, too, was disappointed with the results but noted that sales are still coming, they were only delayed.

At issue was the next wave of LTE buildouts in China, Gavrielov explained, which are now expected in the December quarter. Also at issue: aerospace sales, which Gavrielov said are also only delayed but still coming.

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When asked why Xilinx didn't pre-announce the shortfall ahead of earnings, Gavrielov said the earnings miss was not sizable enough where the company felt a warning was warranted.

While Gavrielov said Xilinx is continuing with its dividend, which the company just raised, and its stock buyback program, Cramer ended the interview without any positive things to say about the company's state of affairs or its managing of investor expectations, including his own for Action Alerts PLUS.

Lightning Round

In the Lightning Round, Cramer was bullish on Magnum Hunter Resources (MHR) , EOG Resources (EOG) - Get EOG Resources, Inc. (EOG) Report, Hexcel (HXL) - Get Hexcel Corporation Report, Dow Chemical (DOW) - Get Dow, Inc. Report and Skyworks Solutions (SWKS) - Get Skyworks Solutions, Inc. Report.

Cramer was bearish on PolyOne (POL) - Get PolyOne Corporation Report, Core Labs (CLB) - Get Core Laboratories NV Report and Cirrus Logic (CRUS) - Get Cirrus Logic, Inc. Report.

Am I Diversified?

In the "Am I Diversified?" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets.

The first portfolio included Goldcorp (GG) , Schlumberger (SLB) - Get Schlumberger NV Report, Vale (VALE) - Get Vale S.A. Sponsored ADR Report, Whole Foods Market (WFM) and Starbucks (SBUX) - Get Starbucks Corporation Report.

Cramer suggested getting rid of Goldcorp and add a health care stock like Abbott Labs (ABT) - Get Abbott Laboratories Report.

The second portfolio's top holdings included Apple (AAPL) - Get Apple Inc. (AAPL) Report, Chicago Bridge & Iron (CBI) , EOG Resources, GW Pharmaceuticals (GWPH) - Get GW Pharmaceuticals PLC Sponsored ADR Report and Micron Technologies (MU) - Get Micron Technology, Inc. (MU) Report.

Cramer said this portfolio can't own both Apple and Micron. He advised selling Micron and adding Boeing (BA) - Get Boeing Company Report.

The third portfolio had Public Service Enterprise (PEG) - Get Public Service Enterprise Group Inc Report, Sysco (SYY) - Get Sysco Corporation Report, Prudential (PRU) - Get Prudential Financial, Inc. Report, Verizon (VZ) - Get Verizon Communications Inc. Report and General Electric (GE) - Get General Electric Company (GE) Report as its top five stocks.

Cramer blessed this portfolio as diversified but advised selling General Electric.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

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-- Written by Scott Rutt in Washington, D.C.

To email Scott about this article, click here: Scott Rutt

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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, BA, GE, SBUX and XLNX.