"I stand corrected on Herbalife" Jim Cramer told viewers of his "Mad Money" TV show Tuesday. "It is a buy."

Cramer said he had been negative on the stock because he assumed it was just another nutrition-supplement player and multilevel marketer, no better than Usana Health Sciences. "But I was wrong," he said.

In fact, Herbalife "does not belong at the bottom of the barrel" and deserves to trade higher, not lower, Cramer said. The company not only had better-than-expected earnings in its most recent quarter, but it also won approval in China to sell its products directly in two provinces, he said.

Herbalife has "a high-margin business model" and generates a lot of free cash flow, Cramer added. Plus, the company is buying back stock, has a 2% dividend and is even benefiting from the weak dollar because of its exposure outside the U.S.

Even after all those positives, Herbalife is selling more cheaply than its peers, Cramer said. But he doesn't believe that should last. This stock is inexpensive and it's not going to stay a market secret forever, he said.

Michael Johnson, Herbalife's chief executive, has turned the company around and now people can get in "artificially low," said Cramer.

Further, said Cramer, Herbalife might be a controversial name, but its supplements seem to work. It is a triple buy, but don't put in orders before the stock starts trading in the regular market session, he advised.

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