Shares have already rallied substantially year to date, yet Cramer thinks there's more upside coming.
"I'm talking about Kroger and I think it deserves to go higher," Cramer said. Following is a summary of his main reasons why.
1. Although Kroger had struggled for many years " over the last few years, the company has found its stride winning share from Wal-Mart and nearly everyone else in the space," Cramer said.
2. , and, in more recent months, the growth has begun to accelerate. "Before 2013, Kroger's same store sales were typically a little less than 100 basis points. Since 2013, that gap has widened to between 150 and 200 basis points."
3. Forthcoming consolidation in the supermarket sector should reduce competition. "Once the Albertsons Safeway merger announced earlier this year, closes, the combined entity will be eliminating a lot of stores, which means less competition for Kroger," Cramer said.
4. Kroger grasped the importance of the rapidly growing market for natural and organic foods much earlier than many of its competitors. Therefore, it's already viewed as a destination for this growing constituency of shoppers.
5. Kroger is ahead of the curve when it comes to technological innovation. "The company has invested heavily in mobile coupons and apps, and they have terrific insight into their customers preferences via a fantastic loyalty program."
Given these tailwinds, Cramer thinks improving consumer confidence could send the shares marching even higher, on the expectation that Kroger will win more business and therefore investors.
And although consumer confidence is bullish broadly, Cramer likes betting on because "the stock still sells at just 14 times next year's earnings estimates, which I think is darned cheap when you consider that the company's got a 12 percent long-term growth rate."
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"In fact, Kroger trades at a discount to the average stock in the S&P 500, and I think Kroger has shown that it's a heck of a lot better than the average company. I could easily see the $51 and change Kroger headed to $60 in the not too distant future.
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