We recently published a list of the Jim Cramer Just Discussed These 13 Stocks. In this article, we are going to take a look at where CVS Health Corporation (NYSE:CVS) stands against other stocks that Jim Cramer discussed recently.
As the Federal Reserve exits the year by having continued its interest rate cuts, Wall Street is wondering what 2025 will hold for markets. Inflation is a key concern among investors, and many believe that the Fed might have to update its models that determine the rate cuts. This update will account for any potential uptick in inflation and one which might be spurred by tariffs imposed by the incoming Trump Administration.
In a fresh episode of Squawk on the Street, Cramer commented on what might happen once the interest rate cuts intensify and how these effects might tie in with Trump’s strategies. Cramer doesn’t “understand that people want to be very concerned about the future after the cut, I really am not buying any of this.” According to him if the tariffs go through then the CPI can rise which will lead the Fed to not cut interest rates. But, if the tariffs don’t materialize or if “they’re targetted tariffs, and we get break in housing, I mean we just saw Tol Brothers, I know it’s only one million dollar house and not a hundred and fifty, but it starts somewhere. And we get some more apartments come in and we have big inventories from more than Ford.”
In the event the CPI rises, Cramer believes that “A year we’ll be sitting here and saying well, okay we had this blip up inflation but that’s over.” As a result, he believes that it is important to focus on “what the President-elect is gonna do. Why do we have to focus so much on what’s going to happen next year for the Fed when they actually have to react to what the President does?”
Cramer also believes that the US needs more workers. Commenting on Japanese billionaire Masayoshi Son announcing $100 billion in investments at Trump’s Mar-e-Lago resort, Cramer stated “I think the most important thing is we don’t have the workers for this stuff.” He added “The idea that we get the workers, and we do not have a good birth rate, robust birth rate, we do not have enough workers, we’re gonna have immigration reform. You know you wanna create jobs, what you need are people to fill them and we don’t have it.”
Another matter that’s caught Cramer’s attention when it comes to the President-elect is Trump’s remarks about taking on healthcare benefit managers once he assumes power. During a press conference at Mar-e-Lago, the President-elect shared that Americans were “paying far too much,. . . .much more than other countries” for healthcare. He added “We have a thing called the middle man, you know, the middle man right? The horrible middleman that makes more money frankly than the drug companies. And they don’t do anything except they’re a middleman.”
Trump says that his team will “knock out the middle man [AND HE’S] going to be very unpopular after that.” According to Cramer, “I think that what, if President-elect Trump follows up about knocking out the middleman, he will. He will because these companies will eventually lose their support in Congress,” as “when you have that kind of come together over them, you don’t wanna be in that business.”
Cramer commented on the impact the President-elect’s comments had and can have on the pharma benefits management industry. According to him “these companies are not, uh, without their friends. And by the way, they all resent the middlemen. Cardinal’s had a lot to be able to be a little bit more forward about what can be done. McKesson is considered to be a company that has done a lot to be able to make it so smaller drug stores get product.” Craner added that “the drug will all give you some great data which shows you that they are not the cause of the inflation. But they always are willing to finger, uh, United Health,” and as for the environment surrounding healthcare benefit managers, “right now, I’ve never seen it this bad for them.”
A row of shelves in a retail pharmacy, demonstrating the variety of drugs and over-the-counter products.
Our Methodology
To make our list of stocks that Jim Cramer is talking about, we listed down stocks he commented on during a fresh episode of CNBC’s Squawk on the Street.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? 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).
CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders In Q3 2024: 63
CVS Health Corporation (NYSE:CVS) is a mega American healthcare plan provider. If you’d read the introduction to our piece, you’d understand how and why it’s operating in a vastly different environment now than earlier this year. Benefits managers like CVS Health Corporation (NYSE:CVS) are under a lot of public and government pressure to meet customer demands for adequate coverage. They also depend heavily on Medicare and Medicaid coverage. Speaking of which, CVS Health Corporation (NYSE:CVS) is also undergoing a strategic shift in its Medicare Advantage business. The firm has faced a tumultuous 2024 after replacing its CEO and halting profit guidance after three consecutive quarterly cuts. Media reports have suggested that CVS Health Corporation (NYSE:CVS) is looking to split its operations to help battle high costs. Cramer pointed out some of the problems that plague the firm:
“CVS stock has just cratered, and then cratered, and cratered again.
“And CVS by the way is a great company. But CVS is part of the, viewed as being part of the problem of the cost of healthcare. And they have no friends. Whatsoever. And by the way when you go to CVS we all know what happens. Its just, you know, customer service, candy aisle, customer service. Yeah, I want to be able to say, to one of them down there, [inaudible] at CVS. I’ll try to get it open. I just didn’t want to hear customer service, candy aisle one more time!
“If you got to Amazon and they do what I think is going to be a huge number of same day, do want to go and wait for your?
“People at home do not watch us everyday and they need to know that these are things [inaudible] it’s existential. It’s the front of the store, in the back of the store. It’s existential, alright?!”
Overall, CVS ranks 9th on our list of stocks that Jim Cramer just discussed. 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 time frame. 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.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
