A Bargain Stock Worth Considering?

In the wake of the massive sell-off, which sent the S&P 500 down 1.9 percent for the week, Cramer went searching for bargains on Friday.

Travelzoo shares, Cramer noted, are down more than 35 percent since before having reported disappointing earnings results in end January. However, the stock is up 251 percent over the past 12 months. Cramer thinks the stock could conintue to climb, even though higher oil prices are likely to put a damper on international travel in the coming months. But Cramer doesn't thinks Travelzoo will be affected by that because it isn't like other travel companies.

Instead of publishing fares online, Travelzoo's deals are only availible to subscribers, who tend to be wealthy. It's a lucrative business, Cramer said. In the past 12 months, Travelzoo's average subscriber acquisition cost was just $2.42 and its average revenue-per-user was 50 cents per month. Within 5 months then, Travelzoo will have paid for the cost of acquiring a new customer. From that point on, everything is pure profit. The average subscriber lifetime is roughly 88 months. So it spends less than $2.50 to get a customer, but brings the company a limetime value of $42.

Travelzoo generates income from fixed-fee advertising. In 2009, travel companies spent $2.8 billion on advertising in the U.S. and Cramer thinks that's an addressable market.

There are, however, a lot of people who don't believe in this stock. The shorts have roughly 20 percent of the float. Cramer likes it, though. He had been a little dubious about its valuation, but because it has growth, he doesn't think it's as expensive as it seems. To find out if this is the bargain he's looking for, Cramer spoke with CEO Chiristopher Laughlin. Watch the video to see his full interview.

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