When the stock peaked in April, things were looking good for the company. It had just reported a strong quarter, and even though the valuation was a bit high at around 20 times earnings, there wasn't much to worry about when the stock began to trade sideways.
Cramer traced the moment of Alliance Data's fall to July when the company reported its second-quarter results. The actual numbers were pretty good, but management provided a pessimistic forecast for the next quarter. The company's loyalty card business was also down 15 percent during the quarter, which many investors interpreted as a shocking decline.
Cracks began to appear in the story during the second half of 2015. When 2016 rolled around, the stock fell about 10 percent in the first four weeks in a brutal market wide sell-off.
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Additionally, when the company reported at the end of January, guidance was weak. That prompted the stock to fall even further. In other words, when Alliance Data missed its revenue projections in the latest quarter, it resulted in a full-year revenue miss for 2015.
"Remember, money managers loved Alliance Data for accelerating revenue growth, but when that ARG is gone, many of these shareholders decided to leave, too," Cramer said.
Alliance Data could have had a credibility problem at that time, which made it hard for investors to believe the company's positive full-year forecast for 2016, Cramer added.
With the stock roaring back in the past three days, and an increased buyback, could Alliance Data be worth investing in?
"While this story isn't red-hot like it used to be, I think the recent weakness in Alliance Data needs to be viewed as a buying opportunity, especially since the company will be in there buying the stock with you," Cramer said.
Even though growth has slowed, the stock still trades at just 10 times next year's earnings estimates. Cramer is willing to pay 10 times earnings for a company with 10-percent growth, even if some think that management has lost credibility and the guidance is too high for 2016.
However Cramer warned that if the market goes back to hating growth stocks, then Alliance Data will be hated, too. Nevertheless, he still thinks it is poised to benefit from many trends, and at some point the stock could be too cheap to ignore.
"The stock may have been humbled by the recent sell-off, but the story, while not perfect, is still sound enough to be worth investing in as long as long as you remember to be patient and buy on the way down," Cramer said.