We recently compiled a list of the Jim Cramer Recently Talked About These 11 S&P 500 Stocks. In this article, we are going to take a look at where CVS Health Corporation (NYSE:CVS) stands against the other stocks Jim Cramer recently talked about.
On Monday, Jim Cramer, host of Mad Money, took a closer look at how the S&P 500 performed in January, highlighting both the successes and the setbacks, and commented on the ongoing tariffs activity. Reflecting on the market’s early response to President Trump’s policies in 2025, Cramer noted that while January was generally a good month for stocks, some of the biggest gainers have since experienced significant pullbacks. According to Cramer, it is important to evaluate both the winners and losers as the year progresses.
Furthermore, Cramer mentioned that his family, with substantial business dealings in Mexico, took Trump’s campaign promise of imposing tariffs on the country seriously, while others did not. While the implementation of a 25% tariff has been delayed by a month, Cramer pointed out that its impact remains real. If enacted, the tariff could become a serious barrier to profitability for businesses on both sides of the border.
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What Cramer did not expect, however, was the response from Mexico’s newly elected president, Claudia Sheinbaum. Sheinbaum took a bold step by deploying 10,000 National Guard troops to address illegal immigration and combat the influx of fentanyl into the country. In exchange, she secured a temporary one-month pause on the tariff.
“I think this opens the door for a change in trade policy, the one that’s much more targeted, now, that’s much smarter than the tit-for-tat approach that China adopted, one that could possibly preserve a lot of commerce we have with Mexico, our biggest trading partner.”
Cramer believes that this approach could help preserve the vital trade relationship between the U.S. and Mexico, a relationship worth $807 billion in 2023. Cramer also cautioned that while this adjustment may help avoid an immediate economic downturn, there’s a risk of unintended consequences. If Mexico’s economy does slip into recession due to the tariffs, Cramer warned, the resulting economic strain could trigger a surge in illegal immigration.
“Bottom line, pretty disparate group of winners and losers if you ask me. Very different from 2024. So why don’t we see how things play out for the rest of the year?”
Our Methodology
For this article, we compiled a list of 11 stocks that were discussed by Jim Cramer during the episode of Mad Money on February 3. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A row of shelves in a retail pharmacy, demonstrating the variety of drugs and over-the-counter products.
CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 63
Cramer was surprised to see that CVS Health Corporation (NYSE:CVS) took the second spot on the list of best performers of the S&P 500 in January and mentioned that there was no straightforward catalyst for its gain.
“Then there’s CVS Health in second… the second-best S&P 500 stock in January is frankly pretty shocking. It’s CVS Health, up 25.8% last month. Now CVS and chief rival Walgreens have both been spiraling in the post-pandemic year. Last year was no exception, CVS in particular. They fired CEO Karen Lynch and its stock finished 2024 down more than 43%. So maybe you could argue it was due for a bounce but the odd thing about CVS’s January rally is the fact that there really is no clear catalyst for it. Now there was plenty of news involving Walgreens last month, very little but good.
But it looks like CVS mostly rallied in response to an announcement from the Centers for Medicare and Medicaid Services, which said early last month, the payments from the government to Medicare Advantage plans are expected to increase by over 4% from 2025 to 2026. But I’m gonna need to see more legitimate good news from CVS before I believe… The company reports next Wednesday. Let’s see what they have to say before chasing the January rally.”
CVS Health (NYSE:CVS) provides healthcare services, including insurance, pharmacy management, and pharmacy products, to various customers, and also offers consulting to healthcare facilities.
Patient Capital Management stated the following regarding CVS Health Corporation (NYSE:CVS) in its Q4 2024 investor letter:
“CVS Health Corporation (NYSE:CVS) struggled throughout the year following a number of disappointments related to their Medicare Advantage business. While this had a negative impact on the near-term financials, the issues are well understood, and changes are already being made for the 2025 program. We see a clear pathway to improving margins throughout 2025 in all areas of the business. Furthermore, the company has upgraded their management team promoting David Joyner to CEO and hiring former UnitedHealth Group executive Steven Nelson to run the managed care business. On a longer-term basis, we continue to think CVS has an attractive combination of assets owning a healthcare benefits business (Aetna), a pharmacy-benefits manager (Caremark), an in-home evaluation business (Signify Health) and in-home primary care business (Oak Street Health) supporting the industry transition to a value-based care model. As the company works to implement the turnaround, the company has an attractive dividend yield of 5.8%.”
Overall CVS ranks 3rd on our list of the S&P 500 stocks Jim Cramer recently talked about. While we acknowledge the potential of CVS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CVS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
