Cramer's 'Mad Money' Recap: Charter Course

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"I need you to stick with Charter Communications (CHTR Quote)," Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

Charter is a stock Cramer said he's liked since February, but it has been such an underperformer that he was beginning to question his own sanity. Then two things happened.

First, Comcast (CMCSA Quote) and a little Midwestern cable company called Insight Communications "unwound a joint venture," giving Comcast control of Insight's assets in Illinois and Indiana, he said.

Right now, Charter is valued at 12% less than what Comcast valued Insight's customers at, said Cramer, and customer valuation is the "key metric" that should be used for cable companies. Moreover, if Comcast is interested in Insight, it might be interested in Charter as well, he pointed out.

But Comcast's second move is what really got Cramer believing in Charter again. Right after its deal with Insight, Comcast bought New Jersey-based Patriot Media, paying almost 50% of where Charter is valued, he said.

If Comcast is paying more for customers, it means customers are becoming worth more and more money, Cramer said. Charter is a buy, he said. "It could trade higher or become a takeover target."

Market-players could buy Comcast, but Cramer believes "Charter has much more upside." But "don't buy it tonight," he said, advising people to wait a couple of days and do their homework first.