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Cramer's Guide To Finding An 'Explosive Growth Story' Stock

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Cramer's Guide To Finding An 'Explosive Growth Story' Stock
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Finding a relatively unknown company that boasts a solid growth story that isn't appreciated by Wall Street isn't an easy task. But that doesn't mean it is impossible, according to CNBC's Jim Cramer.

One of the best examples of an "explosive growth story" hiding in plain sight a few years ago is still one of the hottest stocks today — Facebook Inc (NASDAQ: FB), Cramer explained during his daily "Mad Money" show last week. The company, fresh off its IPO, saw its stock trade in the $20s as investors were concerned it didn't have enough exposure to the mobile advertising market.

But these investors were wrong, and the social media company tried its best to reassure investors that it has undergone a shift to mobile. However, many investors didn't want to listen or didn't bother to do their proper homework and dig through the earnings reports and conference calls, Cramer continued.

"So many people have been blown out of the water by Facebook's disappointments that they were in no mood to listen to the positive story," he said. "Given that we didn't have a position in the stock and therefore didn't feel scorned, we weren't down, we weren't upset, we bought Facebook for the charitable trust in the mid-$20s."

And this is where lesson No. 2 comes into play, Cramer added. So long as each quarter shows improvements from the prior quarter, there is no reason for investors to sell their "explosive growth" stock.

"Solid growth stories are hard to come by, and when you find them, you need to hang on for the ride," he concluded.

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