By Jim Cramer, TheStreet

 

Watch Teva (TEVA) vs. Bank of America (BAC). Watch Medco Health (MHS) vs. JPMorgan (JPM).

 

Why these two pairs? Because I think they represent the cheapest to growth and the cheapest to value. And if things really are slowing badly again, after we determined last week that they weren't, and if value stocks are losing value while growth is coming to the fore, then Teva and MHS -- both of which bucked the downward trend Tuesday -- will get more legs.

 

I like these two growth stocks because they are selling at the biggest discounts to their growth in their histories. Both have reiterated their growth rates repeatedly.

David Snow, the CEO of Medco, recently came on "Mad Money" and actually raised the growth rate for the company. He's also doing a gigantic bond deal that could be used to buy back stock and raise EPS growth rates, although I would prefer it to be used for more acquisitions. Post continues after video:

Teva? There was a brutal raid against the company earlier this summer, led by Sanford Bernstein, saying that its lead proprietary drug, Copaxone, would go off patent much earlier than everyone thought. This was devastating for the consistent double-digit grower -- a big beneficiary of government belt-tightening -- and the scare sent the stock tumbling from $63 to $48. I'm not kidding. It was one of the greatest raids I have seen in my life.

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Now we know from a federal court ruling that the challenge failed and the patent for Teva's blockbuster multiple sclerosis drug is safe. That's why the stock went up Tuesday. But anyone who follows this one knows that a point and change is nothing compared with the slaughter it endured under the knife of Bernstein and company.

 

If the scare stories appearing now to throw back the banks are for real, then MHS and TEVA are the tell, as their discount should be cured by economic weakness and earnings reiteration strength. JPM and BAC? I thought the worst was over after last week and there was no one left to sell. Wishful thinking? These stocks trade with the worst bank stock on earth, wherever that is at the time. If Zeus Bank and Trust fails, these stocks decline 10% -- even if Zeus Bank is entirely made up.

We have three Greek banks down high-single-digit percentages this morning, and a first-class raid on Barclays (BCS). If BAC and JPM retreat to under $13 and $37, then it is back to the drawing board.

 

Why compare both growth and value stocks? Because if there really is another bank-related slowdown, and not just the willy-nilly selling of Tuesday, then the money should go back into growth stocks and out of deep-discount value. It shouldn't just disappear. That's been the pattern on the second day after a big sell-off.

 

Let's see if it holds. You have the stocks to watch for the truth.

 

Random musings: I am reminded of the song "Dynamite" when I listen to Manny Chirico, the CEO of Phillips-Van Heusen (PVH), because he's got all "my favorite brands," to quote Taio Cruz. Phillips-Van Heusen is another logical go-to name that is down 18 points from its peak and is flying very high with an excellent back-to-school season.

 

At the time of publication, Cramer was long Teva, Bank of America, JPMorgan and Medco.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

Click here to learn how to follow Jim Cramer’s trades for his Charitable Trust.

 

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