This stock doesn’t get enough respect, says Cramer

(Click for video linked to a searchable transcript of this Mad Money segment)

If there was a Rodney Dangerfield of stocks, Jim Cramer says it would be this.

Quintiles.

"It just doesn't get enough respect," Cramer said.

Although the business is somewhat complex, Quintiles is essentially a firm to which pharma companies outsource their clinical trial work.

"You should know that Quintiles is the largest player in this space. They've helped to develop or commercialize all of the top 50 best selling drugs out there," Cramer explained

And Quintiles is best known for the work on phase 2,3 and 4 clinical trials – "that's the sweet spot of where the big pharma players are spending their R&D budgets right now," Cramer added.

Looking at the price action, the Street is indifferent, at best.

"Quintiles just came public in May—the stock popped just 5% in its first day of trading, and it's rallied a little more since then," Cramer said. Nontheless, gains don't seem like much when you consider the strength of other IPO's this year.

However, Cramer think the indifference is misguided. He's crunched some numbers and sees a great deal of potential.

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Rodney Dangerfield

"Quintiles is expected to generate $4.3 billion in service revenues this year, and it has a market capitalization of roughly $5.7 billion. If you look at Covance and Parexel, two other contract research plays, and you gave Quintiles the same price to sales multiple, then this would be a $6.5 billion company," Cramer said.

In other words, if Quintiles merely traded in-line with the competition, Cramer thinks it will be a $50 stock. And if recent results are any indication, Cramer thinks Quintiles could even outperform peers.

Earlier in the month Quintiles forecast a 2013 adjusted profit in a range of $1.95 to $2.05 per share on service revenues of $3.76 billion to $3.81 billion.

Analysts on average were expecting a full-year profit of $1.88 per share on revenue of $3.81 billion, according to Thomson Reuters I/B/E/S.

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Quintiles could well be in the health care sweet spot. As drug makers look to launch new products they're choosing to outsource clinical development as a way to cut costs. "That trend plays right into their hands," Cramer said.

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