On September 3, a caller asked if UnitedHealth Group Incorporated (NYSE:UNH) has enough profitable growth that they should consider adding it to their portfolio. Mad Money host Jim Cramer replied:
Yes, the answer: it does, it does. You know, I’ve got to tell you, I thought that last quarter was very, very good. The stock market did not like the quarter as much as I thought it would, but the stock’s making a stand here. I think that UNH is good to buy.
Fundamental Strength and Earnings Performance
Cramer’s bullish stance rests on the core strength of the company’s financial delivery and improving execution. In its second-quarter 2026 report, UnitedHealth Group Incorporated posted consolidated revenues of $112 billion and operating earnings of $8 billion. Adjusted diluted earnings per share reached $6.38, outpacing Wall Street expectations by $1.48. Driven by strong performance across both the UnitedHealthcare and Optum divisions, management raised its full-year 2026 adjusted EPS guidance to a range of $19.50 to $20. Furthermore, the medical care ratio improved to 86.7% down from 89.4% a year prior, showing that medical cost trends and pricing are aligning effectively.
Sector Pressures and Medical Cost Headwinds
On the other hand, Wall Street remains cautious about lingering cost pressures across the managed care landscape. Even though the medical care ratio improved compared to last year, patients continuing to utilize medical services at a high rate keeps expenses heavy. At the same time, commercial insurance margins are taking longer to bounce back. Adding in tighter payment adjustments for government-backed plans along with heavy spending on tech infrastructure, cautious investors could have reasons to wait rather than chasing the stock higher.
Institutional Holdings and Short Interest
Insider Monkey’s data tracking over 1000 hedge funds shows accumulation by major asset managers. 143 hedge funds had positions in UnitedHealth Group Incorporated in Q2 compared to 130 in Q1. Of those funds, Fisher Asset Management was the top shareholder with nearly 9.1 million shares. The firm increased its position in the stock by 74% in the quarter. Additionally, short interest remains low, with the short percentage of the float sitting at 1.92%, showing a general lack of aggressive bearish bets against the stock.
UnitedHealth Group Incorporated brings massive scale, strong cash flow, and raised guidance to the table, even if Wall Street is still hung up on profit margins. While the market waits for medical costs and margins to settle down, Cramer thinks the stock’s improving fundamentals makes it attractive at current levels.
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