Jim Cramer has been a fan of this company for quite some time. But a good stock always needs a new catalyst to drive shares higher.
Fortunately for shareholders, Cramer thinks Perrigo may have just that kind of bullish catalyst as its closes later this week.
"By acquiring Dublin-based Elan for $6.7 billion, Perrigo will save a bundle on its tax bill," Cramer explained. "It allows them to pay Ireland's lower tax rates rather than the much higher ones we have here."
Cramer thinks the savings should be substantial and in turn, the impact on the bottom line should be substantial too.
But it's not just the more favorable tax burden that Cramer finds noteworthy.
As the biggest maker of generic drugs, Cramer thinks Perrigo is in a sweet spot sitting squarely in the middle of powerful trends underway in this nation..
First, Corporate America is trying to cut health care costs by implementing drug plans that encourage the use of generics, many of which are made by Perrigo.
And second, Cramer thinks during the Great Recession people became more frugal and starting using generics to save money. But as the economy improves, "I don't think they will return to brand name drugs," said Cramer . "People have come to realize that brand names and generics do the same darned thing."
All told, despite gains of 45% year to date, Cramer thinks these catalysts should drive shares even higher. And he's not alone in his optimism.
--------------------------------------------------------------------
Read More from Mad Money with Jim Cramer
Hollywood behind Wall Street weakness?
Market absolutely smitten with Twitter
Cramer uncovers undervalued energy stock
--------------------------------------------------------------------
This week, Stifel Nicolaus raised their price target on shares of Perrigo to $165 from $150 with a "buy" rating.
Looking at recent earnings, Cramer believes the most recent results, reported in October, confirm the outlook.
At the time Perrigo said net income was $111.4 million, or $1.18 a share, compared with $105.6 million, or $1.12 a share, for the same period a year ago. Sales were $933.4 million against last year's $769.8 million.
Adjusted earnings were $1.52 a share, well ahead of the $1.39 predicted by analysts polled by FactSet. Sales also beat the FactSet projection of $896.4 million. Perrigo affirmed its previous forecast of $6.35 to $6.60 in full-year 2014 earnings.
Call Cramer: 1-800-743-CNBC
Questions for Cramer? madmoney@cnbc.com
Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com