Try This Retail Stock on for Size

As part of a weeklong series that examines the retail sector, Cramer on Tuesday offered a “cheap derivative play” on the success of Phillips-Van Heusen, which is currently flirting with its 52-week high.

The stock he’s suggesting is Warnaco, a company that designs, sources, markets and distributes sportswear, swimwear and underwear. It’s a derivative play on Phillips-Van Heusen because it also licenses its popular Calvin Klein brand.

“Calvin Klein is the big moneymaker here for Warnaco,” Cramer said. “They make the clothes and run the retail outlets, paying a royalty to Phillips-Van Heusen for the privilege.”

Calvin Klein alone accounts for three-quarters of Warnaco’s revenues, and over the next four to six years management thinks it could double in size. Warnaco also licenses Chaps from Ralph Lauren and Speedo’s, too. Plus, it owns its own brands, like Olga and Warner’s.

Cramer likes that the New York-based company has a lot of international exposure. Fifty-five percent of its sales comes from outside of the US.

Warnaco posted very strong results when it reported quarterly earnings on Nov. 8. The company had a 9-cent earnings beat off a 95-cent basis, with revenues rising 15 percent year-over-year. And despite a 16-percent long-term growth rate, the stock is currently trading at just 13 times next year’s earnings.

“That makes it one of the cheapest apparel plays you've probably never heard of,” Cramer said.

To learn more about where this company’s going, Cramer spoke with CEO Joseph Gromek. Watch the video to see the full interview.

Call Cramer: 1-800-743-CNBC

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