Jim Cramer Says CVS "Has Proven to Be a Port in the Storm for Healthcare Investors"

CVS Health Corporation (NYSE:CVS) is one of the stocks Jim Cramer recently shed light on. Discussing the company’s turnaround efforts during the episode, Cramer stated:

“This has been the best performer, get this, in the healthcare sector in the S&P; it’s up more than 58% for the year… Now some of this is because CVS has become the last man standing in the retail pharmacy space… But some of it’s simply because the stock of CVS already got pulverized last year… We haven’t seen numbers like this from a drugstore chain in ages…

So from end to end, CVS business is simply doing much better than it was 12 months ago. The sore spot managed care business isn’t exactly thriving, but it’s much stronger than anticipated, and seems to have gotten its arms around the most pressing problem, higher medical utilization rates. Meanwhile, the biggest division, health services, is powering forward as Caremark continues to perform well, and increasingly powerful pharmacy business is driving surprisingly strong numbers on the drugstore side because CVS no longer has any major rivals.

I bring all this up because, though the stock’s up over 58% for the year, do you know this thing only sells for just 11 times the midpoint of its new full-year earnings forecast, 11, 11. That’s ridiculously cheap…

Let me give you the bottom line here in this very exciting story: Healthcare has been horrendous this year, but CVS, one of the worst performers in the entire market in 2024… has proven to be a port in the storm for healthcare investors. It is up 58%, leads the entire cohort, fixing its most problematic business, managed care, and seeing real strength in other parts of the business, especially the pharmacy side, where it is the last man standing. Plus, given the cheapness of the stock, generosity of the dividend yield, here’s what I’m saying: Buy CVS.”

CVS Health Corporation (NYSE:CVS) delivers healthcare services that include insurance, pharmacy benefit management, and the distribution of pharmaceutical products. The company also provides consulting support to healthcare organizations.

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Disclosure: None. This article is originally published at Insider Monkey.