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Cramer: This stock deserves more respect!

TiVo CEO: Hope to reinvent television

(Click for video linked to a searchable transcript of this Mad Money segment)

"The market refuses to give this $12 stock the respect it deserves," Cramer insisted.

The Mad Money host was talking about TiVo, a company at the forefront of the DVR revolution.

Although TiVo was first introduced in 1999, if you think TiVo is simply a company trading on 14-year old technology Cramer says think again.

"Selling its own proprietary hardware along with a monthly service fee is the old business model," Cramer said.

Going forward, the company has developed many new ways to generate revenue.

For example, TiVo now gets new subscribers through partnerships with cable companies. "Although TiVo has slightly less than a million subscribers to its company owned service, it has more than twice that or 2.6 million subs through various cable operators," Cramer said.

Rodney Dangerfield
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Also, over the last few years, TiVo has shifted to licensing out its DVR technology to other company's – much like an intellectual property company.

On top of that Cramer is impressed by some of the new devices.

"The company just launched their new Roamio DVR, which let's you record things on your TV and then stream them to your mobile devices, even if you're out of the house," Cramer noted

Of course none of these catalysts would matter if the financials weren't strong – but Cramer says they are strong. "TiVo has gotten aggressive about cleaning up its balance sheet."

In part it's the company's financials that led Cramer to conclude the stock deserves more respect.

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"This is a $1.5 billion company that's sitting on a billion dollars in cash, and has around $172 million in debt. In other words, this is a $12.stock with $7 in net cash per share. Back out the cash and it's only selling for 16 times next year's earnings estimates, despite having a 48% long-term growth rate," Cramer said. "That's absurdly cheap."

Call Cramer: 1-800-743-CNBC

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