The other part of PerkinElmer is the Environmental Health division, where they develop technology and make instruments for detecting contaminants in food and water, to industrial end markets like chemicals, semiconductors and even construction.
"This is a slower-growth, lower margin business that's also more cyclical than the human health side, meaning that the environmental biz is more captive to the health of the overall economy, both here and around the world," Cramer explained.
Cramer thinks it's this unit that's creating headwinds for shareholders.
"Just last week PerkinElmer got slammed after it reported a disappointing quarter, with the stock falling from $34.47 to $30 and change, a decline of nearly 12%. However, much of the weakness came from the company's environmental division. In fact, 85% of PerkinElmer's business grew at a 3% clip year over year—most of the company is chugging along at a slow and steady pace—but the other 15% of the company was down 25% thanks to weak environmental sales," Cramer noted.
That's not to say after the spin-off, the Environmental Health division would be a weak player – Cramer sees plenty of opportunity, however over a longer time horizon.
"This business is largely a play on increased consumer safety regulations, and it has a decent and growing exposure to China, where issues of quality control are starting to become very important," Cramer explained. "You spin-off the environmental business, then it can focus more heavily on China and other emerging markets. And once the Chinese economy gets back on its feet, this part of the business could really roar, too. "
What's the bottom line?
"I believe that if PerkinElmer were to break up, it could evolve into a very robust, human health division," said Cramer, "and an environmental side that has long term potential as the global economy improves."