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A ‘Dirt Cheap’ Growth Play?

The bulls are still running in the shoe business, Cramer told the audience at this year’s “It’s a Family Affair” show on Thursday. Even though some of these stocks have returned triple-digit percentages since the March 2009 lows, he’s expecting still more gains to come – especially from one of them.

Since the market bottomed over a year ago, UGGs maker Deckers is up 332%, Steve Madden jumped 292% and Skechers USA has surged an amazing 698%. Even industry behemoth Nike almost doubled, registering a 93% increase in that time. These runs will only continue, though, for the companies that can innovate.

Like Skechers, which owns 50% of a brand-new shoe category called “toning.” These are the shoes and sandals that are designed to give people better posture, promote weight loss, improve muscle tone and reduce joint stress. They allow the wearer to burn the same amount of calories running in 20 minutes that would ordinarily take 30 minutes in a regular running shoe. Cramer likened them to the aerobic shoes that Reebok once introduced, which eventually catapulted that stock 100 points higher.

A lot of consumers haven’t yet heard of toning, though, leaving open a $4.6 billion market opportunity, according to footwear analysts Wedbush. And even though Skechers sells just one toning product, it in just two quarters of reporting already makes up 10% to 15% of the company’s business.

Skechers in smart, though. At last week’s New York Shoe Expo, the company announced it is expanding its toning category from one product line to four. Given the selling strength of the first shoe, Cramer thinks these new products have “enormous potential.” He said the release of the Resistance Runner on July 15 should be “a terrific catalyst for the stock.”

The success of the toning shoe has spilled over into Skechers other shoes as well. Cramer called it a halo effect, like the way Apple’s iPod introduced PC users to the Mac. This may have had something to do with the company’s great most recent quarter, where earnings came in 12 cents ahead of expectations on revenues that jumped 44%.

A final point worth noting: Skechers’ stock has soared over these past 15 months, but it’s still trading at just 12 times next year’s earnings despite its 15% long-term growth rate.

“That’s dirt cheap,” Cramer said.

So, “These shoe stocks may have had huge runs,” Cramer said, “but this bull run is not finished.”

When this story published, Cramer’s charitable trust owned Apple.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

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