Jim Cramer Talked About These 17 Stocks After The Fed’s Rate Cut

5. CVS Health Corporation (NYSE:CVS)

Number of Hedge Fund Holders In Q3 2024: 63

CVS Health Corporation (NYSE:CVS) is another embattled healthcare benefits manager. The firm has entered the current turmoil surrounding the industry with significant investor pessimism on its back. Soaring costs have led to a potential breakup of the firm, and CVS Health Corporation (NYSE:CVS) is also not only facing broader pessimism against the benefits management industry but it is also under fire from the Justice Department. The Department’s lawsuit claims that the benefits manager contributed to the opioid crisis, and similar suits in the past have cost upwards of $5 billion to resolve. All these factors were on Cramer’s mind when he discussed CVS Health Corporation (NYSE:CVS):

“I want to add to the danger. This is a Justice Department suit that was just filed. Not today, but, David, when you read this suit, I don’t think people have read it. This is about opiate. And we thought we settled all those cases. . . .Justice Department, Bobby Whelan, and last thing his Justice Department does, really going after them for opioids. [QUOTING FROM THE SUIT] “To reduce its labor costs, CVS set staffing levels so low that it was impossible for pharmacists to comply with their legal obligations.” Meaning that the pharmacists were not any sort of, they didn’t gate this. If anything they allowed opiates to be sold, but they bore unresolved red flags of invalidity and it didn’t matter. CVS pharmacists described working in CVS as “a soul-crushing experience. . .impossible to meet the company’s expectations.”

“What I’m saying is this that we all know you can’t get, it’s all lock and can’t see CVS in the front of the store. In the back, pharmacists just didn’t have the chance to be able to comply and stop opiates. And I’ve got to tell you David, this is one of those, they’ve got new management there but, this is not going to go away. They’re [JUSTICE DEPARTMENT] saying it really contributed to the opioid crisis.

“CVS is going to be challenged in every part of the business. And I don’t like this suit from the Justice Department. I don’t like it because, filed first of all in Rhode Island where CVS is. But there is a chance David, that they are going to be front and center again with opioids.”

“But there’s people buzzing if it’s the next Walgreens.

“By the way, I like these guys, they’re really trying to turn it, but David there’s a lot of damage. And this Justice Department suit is part of it.”