Despite 1,900% gain, still a cheap stock?

Don't be freaked out by Priceline's price tag: Cramer

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

Cramer thinks this is the cheapest momentum stock in the market.

He's talking about Priceline.

Even though the stock has posted a truly stunning five-year gain of 1,900%; and even though shares trade for over $1,000 each, Cramer says "this is the growth stock to own right here and right now."

"I think Priceline is actually among the cheapest momentum stocks out there," insists the Mad Money host.

"When you back out the billions of dollars of cash on the company's balance sheet, Priceline sells for just 19 times next year's earnings estimates, despite having a 20.7 percent long-term growth rate," he said.

Of course Cramer is a fundamental investor and he doesn't think an inexpensive stock is a buy simply because it's undervalued. "Lots of stocks seem undervalued and then stay that way forever," noted Cramer.

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In the case of Priceline, the Mad Money host sees the stock as well positioned to profit from a major shift underway in the travel industry - something Cramer calls a long-term theme.

In this case, the investable theme involves individuals as well as business travelers forsaking travel agencies and instead booking online.

Of course Priceline isn't the only online travel site winning share away from travel agencies. Others stand to gain market share, too. However, Cramer thinks of all the companies in the space, Priceline is the best stock to own. Here's why:

1. Overseas growth: "Priceline has huge European exposure," said Cramer and I believe that's a big opportunity. In fact, Priceline gets 85 percent of its bookings from overseas versus just 44 percent at Expedia and a piddling 20 percent at Orbitz."

2. Hotel strategy: "The vast majority of Priceline's revenues come from hotel bookings—90 percent to be exact—which is much more profitable than selling airline tickets," Cramer explained. "The global lodging industry is extremely fragmented, whereas the airlines industry has been consolidating rapidly. Expedia is only 75 percent hotels, and Orbitz is merely 50 percent."

3. Profitable business model: "Priceline was the first player in the industry to adopt an agency business model, meaning they act as a broker between the hotel and the customer, and then take a 15 to 20 percent cut of the transaction whenever someone books a room. This is a much safer way to do business than the merchant model, where you buy hotel inventory upfront and then take on all of the risk, even as you do get a larger cut if you end up selling the rooms," Cramer said.

4. Mobile strategy: "Priceline has become the king of mobile travel reservations thanks to its brilliant $1.8 billion acquisition of Kayak, completed earlier this year," Cramer said.

All told, Cramer sees every reason for this stock to rally further.

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Into the end of the year, Cramer believes money pros will drive shares higher for the sake of window dressing, if nothing else.

And into 2014 and beyond he thinks shares advance as the Street comes to realize the scope of the opportunity.

"There are momentum oriented money managers out there who are willing to pay up to twice a rapidly-expanding company's growth rate, which in Priceline's case would be 40 times earnings," Cramer said. "Considering it's currently trading around 20 times earnings, the stock could potentially double."

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