Jim Cramer on UnitedHealth (UNH): "I Would Use Strength to Sell Even More"

We recently published a list of Jim Cramer Put These 12 Stocks Under the Spotlight. In this article, we are going to take a look at where UnitedHealth (NYSE:UNH) stands against other stocks that Jim Cramer discussed.

On Friday’s episode of Mad Money, Jim Cramer reflected on a significant shift in market sentiment over the past week as he described how the mood turned from cautious to confident.

“We often speak of moments when the stock market tends to do well…. We know that stocks thrive, for instance, when interest rates are going down but there’s another auspicious moment and that’s when the conventional wisdom collectively decides that because of extenuating circumstances, in this case, a welcome break from ever higher tariffs, we’re no longer at risk of a recession in the near future.”

READ ALSO 15 Stocks on Jim Cramer’s Radar and Jim Cramer Recently Commented On These 12 Stocks

Cramer pointed out that this kind of collective pivot in sentiment can be just as impactful as a rate cut. He emphasized that in his long career observing markets, moments like these often mark good entry points for investors. He believes that we are currently in one of those moments.

Looking back on what he called a “very bullish” week, Cramer said it will likely be remembered as the period when Wall Street strategists began to back away from recession warnings. He said that the retreat from doomsday predictions helped fuel a strong rally, especially among industrial stocks.

“If hedge funds thought we were about to experience the apocalypse, and many of them did, then they were poorly positioned coming into this week. And when hedge funds are poorly positioned, you get incredibly motivated buyers like the ones we saw all week that help take us all the way…. And they may not be done with all of their buying, at least because we’re suddenly in a very different world with the pessimists having been caught with their pants down. Until they turn optimistic, which might take a little bit, we should remain in good shape.”

Our Methodology

For this article, we compiled a list of 12 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on May 16. We listed the stocks in ascending order of their hedge fund sentiment as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.

Why are we interested in the stocks that hedge funds pile into? 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 150

A caller asked what they should do about and in response, Cramer said:

“Okay, we got the first good news in UnitedHealth since all these problems have come about, and that there was a lot of insider buying today. So you have to ask yourself, why would they buy if they felt that they were going to have a big problem with the Justice Department? That made me feel like that maybe the heat’s going to be off of it for a little bit, but I am not happy with UnitedHealth, and I would sell, I would use strength to sell even more. Why? Because we gotta find out about what Justice is going to do, and even the insider buyers may not know what they’re going to do. Justice is what I call a wild card.”

UnitedHealth (NYSE:UNH) provides a wide range of healthcare services, including insurance plans, care delivery, data analytics, consulting, and pharmacy benefit management. The company’s offerings support individuals, employers, healthcare providers, and government programs. Here is what Cramer had to say about UnitedHealth (NYSE:UNH) on May 6:

“Okay, it’s going to be under pressure for some time because a lot of companies really, a lot of big pension funds and mutual fund managers, thought everything was perfect. But I am going to say today at $400, I would indeed start a position. I have been very negative on UnitedHealth from 630 down to this caller right here. I would start a position at 400 bucks. That’s a big change for me.”

Overall, UNH ranks 2nd on our list of stocks that Jim Cramer discussed. While we acknowledge the potential of UNH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk.  If you are looking for an AI stock that is more promising than UNH and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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