Jim Cramer’s Latest Lightning Round: 10 Stocks to Watch

1. Humana Inc. (NYSE:HUM)

Number of Hedge Fund Holders: 71

Humana Inc. (NYSE:HUM) offers medical and specialty insurance products in the U.S. It provides a range of medical and supplemental benefit plans tailored for individual clients. Among its responsibilities is the administration of the Limited Income Newly Eligible Transition prescription drug program, in partnership with the Centers for Medicare and Medicaid Services (CMS).

Additionally, the company holds contracts to deliver Medicaid, dual-eligible, and long-term support services across various states. Talking about Humana (NYSE:HUM), Cramer said “You know what, if you can’t price the product, get out of the business. Sorry, that’s the way I feel”.

Recently, the company reported a significant decrease in the number of members enrolled in its Medicare Advantage plans that received four stars and above in the CMS Star Ratings system. Within the Star Ratings system, the Centers for Medicare and Medicaid Services (CMS) grants annual bonus payments to plans rated four stars or higher. Plans that achieve better ratings can qualify for larger bonuses.

Citing preliminary 2025 MA Star Ratings data, the company mentioned that there are approximately 1.6 million members, or around 25% of the total enrollment in plans rated four stars or higher, a stark decline from nearly 94% in 2024.

On October 2, BofA analyst Kevin Fischbeck downgraded the company stock to Underperform from Neutral with a price target of $247, down from $376.

Diamond Hill Capital stated the following regarding Humana Inc. (NYSE:HUM) in its Q2 2024 investor letter:

“Other top Q2 contributors included Humana Inc. (NYSE:HUM) and Boston Scientific Corporation. Shares of health insurance company Humana rebounded from their recent downturn, which was tied to investors’ concerns about weaker-than-expected Medicare Advantage rates for 2025 and was the byproduct of an overall difficult operating environment.”

While we acknowledge the potential of Humana Inc. (NYSE:HUM) 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 HUM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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