Jim Cramer’s 10 Best Stocks to Buy After Fed Rate Cut

2. UnitedHealth Group Inc. (NYSE:UNH)

Number of Hedge Fund Investors: 114

Jim Cramer observes that UnitedHealth Group Inc. (NYSE:UNH), a healthcare company, has historically performed well during periods of interest rate cuts. Despite its potential to be affected by economic downturns, UnitedHealth Group Inc. (NYSE:UNH) has demonstrated strong operational excellence and has outperformed its competitors in the managed care industry.

“United Health is an unusual rate cut winner. In theory, it should be more of a slowdown stock, but empirically, it’s done very well when the Fed starts cutting rates. UNH is a terrific operator that’s been pulling away from the rest of the managed care space, but I wouldn’t recommend buying it right here unless you think the Fed’s desperately cutting rates because the economy is falling apart. Then you buy UNH. I don’t see that happening.”

UnitedHealth Group Inc. (NYSE:UNH) continues to demonstrate strong financial performance, with Q2 2024 total revenue reaching approximately $92 billion. This growth, driven primarily by its UnitedHealthcare and Optum segments, underscores the company’s ability to capitalize on favorable market conditions. UnitedHealth’s diversified business model, encompassing health insurance, data analytics, and pharmacy care services, provides a strong foundation for sustainable growth.

UnitedHealth Group Inc. (NYSE:UNH)’s focus on innovative healthcare solutions is clear in its investments in technology, particularly in telehealth and digital health, which enhance patient outcomes and lower costs. The growing membership base, especially in government programs like Medicare Advantage, is expected to drive future growth as the population ages.

Invesco Growth and Income Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2024 investor letter:

“UnitedHealth Group Incorporated (NYSE:UNH): Like many managed care providers, United Health has come under pressure from rising medical costs and higher-than-expected utilization. The stock is currently undervalued based on our analysis. We view the company as a high-quality compounder with secular growth opportunities in the managed care segment. The US Presidential election may cause additional near-term uncertainty, but we believe United Health will be able to rebound once pricing and utilization issues normalize.”