Jim Cramer's Mad Money In-Depth Stock Picks, Feb. 27

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Tuesday February 27. Click on a stock ticker for more analysis:

Protect Yourself

Cramer discussed the market's 416 point plunge, the worst one-day drop in years, which began with an "overheated market" in China. He added, "my sources indicate a big options trade went awry and some concentrated ETF selling ... simply crushed this market as easily as a knife through butter." Cramer suggested three safeguards to protect investors against "the whims of a broken market": stocks which pay dividends equal or higher than Treasuries after taxes, bargain stocks with great buybacks and stocks which are defensive enough to weather a worldwide slowdown. He added the only way to be safe is to invest in companies which meet at least one of these criteria.

Trust the Big Five : Merrill Lynch (MER), Lehman Brothers (LEH), Morgan Stanley (MS), Bear Stearns (BSC), and Goldman Sachs (GS)

There is hope in the five major brokers, says Cramer, all of which have great management. He calls these five the "best-run companies on Earth" and notes they are selling at a 30% discount, which will not last. They are low because they have been getting hit for the last five days, and Cramer warns they will go down before going back up, but he would start a position as they drop. Although he likes all five, Cramer's top pick is GS, and calls it "the best-run I've ever seen it."

Related: Augstin Gonzalez looks at the pros and cons of Goldman Sachs.

Don't Panic

Cramer notes that, when the market breaks, people make the mistake of panic selling and regret it later. He would use the down time as an opportunity to buy good stocks on the cheap. There will be buying opportunity, according to Cramer, since he doubts the drop is finished, just as the 1987 crash continued after that fateful first day. Cramer reiterated his warning to look for buybacks and dividends when buying.

CEO Interview: James Morgan of Daktronics (DAKT)

When Cramer asked James Morgan why Daktronics would still be a good investment after missing its quarter, he responded that the disappointment was related to projections for the coming quarter, drivers of growth are still in place and the company will be able to respond to anticipated growth. "One of the limiting factors is getting though the regulatory constraints that exist," he added, saying that regulations are preventing digital billboards from going up more quickly. Cramer comments that he is ambivalent about DAKT and gives it a "don't buy."

Related: On his February 9th Mad Money show, Cramer was bullish on Daktronics.

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