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What the heck is up with this bizarre pizza joint?

Don't chase this pizza stock: Cramer

What the heck is going on with Papa Murphy's? This stock is totally on fire lately, up 42 percent year to date. Jim Cramer is used to seeing these kinds of moves from biotech stocks, but not from a pizzeria! Could this be the real deal?

Cramer knows that the gigantic decline in the price of gasoline has provided extra expendable income in the average American's pocket, some of which is spent going to restaurants.

"Papa Murphy's isn't merely the beneficiary of a rising tide that's been lifting all ships. This is actually a pretty unique story, and one that's also benefiting from the increasing allure of natural and organic offerings, especially among the younger generation," the "Mad Money" host said.

So, what the heck is the difference between Papa Murphy's and a company like Papa John's or Domino's? It's the take n' bake concept. Basically you walk into the place, and they prepare a pizza right in front of you. Then you take the uncooked pizza home and bake it in your own oven.

Papa Murphy’s pizza
Source: Papa Murphy’s

It might sound bizarre, but the concept has caught on like wild fire! Murphy's is now the fifth overall pizza chain in the U.S. and the No. 1 take n' bake pizza chain.

Cramer thinks it's actually a pretty smart business concept, because it has a lot less overhead since they don't need to pay for ovens or delivery people. That means they can sell pizzas at a lower price point, and the freshness of cooking the pizza in your own oven is as good as it gets.

It was quite evident that the business model was working when Papa Murphy's reported on Tuesday, and announced that same-store sales increased by 8.4 percent; company-owned stores gained 10.5 percent.

"That's a good number, however, the real reason I'm excited about this speculative stock—the reason why I've devoted a whole segment to it—is the growth opportunity," Cramer said.

Long term, Papa Murphy's expects to increase locations to 4,500 stores, up from nearly 1,500 in the U.S. alone. That's triple the store count!

Money managers will be salivating over this thing. And while many restaurants have gone awry by increasing store counts too aggressively, Cramer does not believe that Papa Murphy's will be one of those stores.

And while Cramer is also salivating over this stock, it is important to keep in mind that it is an ultra-speculative small-cap stock. That means he thinks investors should only buy it into weakness, and always use a limit order so you don't get burned.

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"This is a novel and successful concept that still has a ton of room to grow, but it's also extremely speculative, so please be careful. Do not chase this one," Cramer added.

That means you should wait for the next marketwide pullback and build a position in small increments with limit orders. And if it's done while eating fresh pizza, that's even better.

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