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Cramer: 'Terrific & Underappreciated' Healthy Stock Play

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In celebration of Healthy Week at NBCU, Jim Cramer identified what he calls, "a terrific underappreciated health play."

"I'm talking about Dean Foods , " said the Mad Money host, " the largest maker and distributor of milk and dairy products in America.

But Cramer doesn't consider Dean a health stock just because it sells milk – he's a fan because the company has a healthy, organic foods division called WhiteWave-Alpro where they sell things like Horizon Organic Milk, as well as Soy, Almond and Coconut based milk products like Silk.

"For ages, I thought that this WhiteWave-Alpro business would make a terrific spin-off, " Cramer said. And what do you know? Sure enough, back on August 7th, Dean Foods filed for an IPO of the WhiteWave Alpro business."

But that's not all.

Management is aggressively trying to unlock value for shareholders by selling off divisions that could be worth more separately than they are under the same roof, and that's something Cramer likes a lot.

"Gregg Engles, the CEO of Dean Foods, is clearly committed to putting his shareholders first, " said Cramer. "On September 26th, Dean announced that it is exploring a possible sale of its Morningstar business, which makes extended shelf life creams, coffee mixes, aerosol whipped toppings and blended iced beverages… Dean Foods hasn't yet found a buyer for their Morningstar business, but the talk is that they could sell it for about a billion dollars."

Of course Cramer is aware of the stock has slid lower in recent days.

"UBS cut estimates based on worries about food cost inflation, pointing out that fluid milk prices have increased by 24% since bottoming in the second quarter. That can't be good for the company's bottom line, " he said.

However, Cramer isn't terribly worried.

"Last quarter Dean's management reported that milk inventories remain high, so perhaps we shouldn't be too concerned, and they're taking out costs in the core dairy business left and right. Plus, Dean Foods is the largest milk business in the United States, they control 38% of the market, and that gives the company tremendous pricing power. And you know what? Even if the increase in milk prices hurts Dean Foods, this is something that I believe is baked into the share price."

According to Cramer, what matters most for investors is the fact that Dean Foods is breaking itself up.

"The big question is how much value Dean can unlock by spinning off WhiteWave and selling Morningstar, because this is one of those stories where the sum of the parts is worth more than the whole."

Deutsche Bank and Goldman Sachs both did their own separate sum of the parts analyses of Dean Foods, and they both came up with the same number, about $20 a share.

That's 36% to 40% higher than where Dean Foods is trading at the time this post was written.

And even if you argue that the environment isn't great M&A right now, Cramer isn't worried.

"I could make a very strong case that this stock is going to $18 just on the strength of the WhiteWave IPO."

"Remember, " Cramer said, "you have to consider this Whitewave company in the same pantheon asHain Celestial and Whole Foods , two stocks that are very highly valued in large part because the market likes companies which recognize that healthy eating is the way of the future, not just a week here at NBC Universal."

What's the bottom line?
"Dean Foods has a healthy organic division buried within their big milk and dairy business, so the company's doing the smart thing and breaking itself up to unlock the value of the hot, healthy, organic WhiteWave biz. I think the recent pullback in this one is giving you a terrific opportunity to buy a great break-up story, " Cramer concluded.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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