Jim Cramer Says Nutex “Might Need a New Catalyst” to See More Upside

Nutex Health Inc. (NASDAQ:NUTX) is one of the stocks that Jim Cramer shed light on. While Cramer acknowledged that the company has an “interesting story,” he said:

“… Why is the stock coming in over the past couple of months? Well, after a modest pullback in late May, Nutex started pulling back hard in the first week of June, ultimately falling more than 27% that week. Towards the end of that week, an analyst at Benchmark wrote a note explaining that the pullback was because of Blue Cross Blue Shield of Georgia filing a lawsuit against two physician provider groups that are using that same arbitration process that Nutex has had so much success with.

Now, look, the lawsuit doesn’t involve Nutex, okay, but it’s possible the arbitration gravy train might be facing some additional scrutiny, and that’s why I’m reluctant to stick my neck out for this one. I have zero read on the lawsuit in Georgia, but the fact that Nutex’s success in this arbitration process has come so easily out of nowhere makes me worry that perhaps it could go just as easily away out of nowhere. Plus, they’ve already had two great quarters fueled by the process.

In two more quarters, they’ll be lapping the changes, and those tremendous growth numbers will indeed evaporate. At best, it’s a major one-time change that instantly made Nutex a lot more profitable. But given that the stock’s already… you know, just up gigantically, you might need a new catalyst if you want more upside… In the end, Nutex has an interesting story, but it sure feels like I missed it. How about that? Now, because we missed it, it’s risky.”

Pixabay/Public domain

Nutex Health (NASDAQ:NUTX) is a physician-led healthcare company that manages micro-hospitals, specialty hospitals, and outpatient departments offering 24/7 care. The company provides emergency and inpatient services, behavioral health, diagnostic imaging, laboratory testing, pharmacy services, and administrative support to affiliated healthcare providers through a cloud-based platform.

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