Cramer's 'Mad Money' Recap: Google as Value Buy

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Google (GOOG Quote) is going to $560, Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

This is Cramer's "lowball price target" for the stock, which closed at $473.31 Tuesday. But what people should really care about, he said, is how portfolio managers approach a stock because "they're the ones who control the prices."

When most people look at Google they look at its high price and get scared off, but what portfolio managers see is Google's earnings and growth and both are impressive, Cramer said.

To show that Google will indeed go to $560 and it's not too late to get in, he compared it to five similar companies.

What people need to do is figure out what portfolio managers are willing to pay for Google, a stock with $14-per-share earnings and 34% growth, he said.

Taking a look at Starbucks (SBUX Quote), Cramer said this company, which is "growing aggressively," has 21% growth and sells at 53 times earnings.

If people apply Starbucks' earnings and growth multiples to Google, the Internet company would be a $742 stock, he said.

Whole Foods (WFMI Quote) has more growth than any other retailer, with double-digit same-store sales, and when people apply its earnings and growth multiples to Google, "it could be worth $644," Cramer said.

Moreover, comparing Google to F5 Networks (FFIV Quote), he said Google could be worth $546 and when compared with Akamai Technologies (AKAM Quote), which has 23% growth and sells at 56 times earnings, Google's price could be $784.

Finally, taking Hologic's (HOLX Quote) growth and earnings and applying them to Google could make it an $826 stock, Cramer said.

"We have a dilemma here," he said. Under every comparison Cramer comes up with, he said he cannot justify containing Google this low, at $473.

Portfolio managers are going to set the price and are willing to pay more for the stock, Cramer said. "Google can't stay this low."