Jim Cramer’s 5 Latest Stock Picks

This article presents an overview of Jim Cramer’s 5 Latest Stock Picks. For a detailed overview of such stocks, read our article, Jim Cramer’s 11 Latest Stock Picks.

5. CVS Health Corp (NYSE:CVS)

Number of Hedge Fund Investors: 64

Jim Cramer recently said in a program that CVS Health Corp (NYSE:CVS) CEO Karen S. Lynch is executing a “turn.” Cramer said it’s a “very big turn” which will take some time and won’t happen “overnight.” Cramer said he talked to CVS Health Corp’s (NYSE:CVS) management at a conference and he is a “believer” when it comes to CVS Health Corp (NYSE:CVS).

As of the end of the third quarter of 2023, 64 out of the 910 hedge funds tracked by Insider Monkey had stakes in CVS Health Corp (NYSE:CVS). The biggest stake in CVS Health Corp (NYSE:CVS) is owned by Richard S. Pzena’s Pzena Investment Management which owns a $65 million stake in CVS Health Corp (NYSE:CVS).

In its fourth quarter 2023 investor letter, Vltava Fund stated the following regarding CVS Health Corporation (NYSE:CVS):

“Not every transaction creates value. Some transactions destroy company value. An example of such transaction is CVS Health Corporation (NYSE:CVS)’s acquisition of Oak Street Health in early 2023. This acquisition cost CVS $10.6 billion, and, based on metrics cited by the company itself, it seems to us that it was a waste of money for the most part. Unfortunately, CVS has its own history of overpriced acquisitions. The last one prior to that was in 2018, when CVS bought health insurer Aetna for $69 billion. We had assumed that CVS management, which has since changed, would recognise that mistake and learn from it. We were wrong. The acquisition of Oak Street Health is both disappointing and a warning to us. We now have a company in our portfolio whose capital allocation we consider to be poor and that should not be there. Unfortunately, the situation is complicated by the fact that the CVS stock is now very cheap and therefore we are reluctant to dispose of it just yet. We probably will do so, however, when the opportunity arises.”