Jim Cramer Recently Talked About These 11 S&P 500 Stocks

3. 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%.”