Traders work at the post where UnitedHealth Group is traded on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
UnitedHealth Group‘s (UNH) exceptional quarterly results on Friday are a promising indicator for the broader health-care industry, as highlighted by CNBC’s Jim Cramer.
The outstanding performance of this managed-care behemoth was reflected in its adjusted earnings of $6.56 per share and revenues of $92.4 billion for the three months ending September 30. These figures exceeded the expectations set by Wall Street.
Following this positive news, shares of UnitedHealth experienced a rise of approximately 2% on Friday, reaching around $535 per share. In comparison to the overall market, the S&P 500 health-care sector observed a surge of nearly 1%, with only the energy and financial sectors performing better. It is worth noting that UNH holds the position of the highest-priced stock in the Dow, therefore, significant movements in its shares can significantly impact the 30-stock average.
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According to Cramer, UnitedHealth “holds a pivotal position in the health-care universe, and as a result, numerous stocks are expected to perform well based on this news.” He highlighted Humana (HUM) as one of the stocks that experienced a surge of nearly 2.5% on Friday. It is important to note that Cramer’s Charitable Trust, which is the portfolio used by the CNBC Investing Club, owns shares of Humana.
This is the second time that UnitedHealth has reported quarterly results since it issued a warning in June about rising medical costs due to an increase in procedures from elderly individuals.
Notably, the comments made by the company in the past had significant repercussions for health-care stocks. Fellow insurers, such as Humana, experienced a decline in their stock prices, while many medical device makers saw an increase in their shares.
The better-than-expected second-quarter results reported by UnitedHealth in July helped alleviate investor concerns, and Cramer suggests that the latest report provides further reassurance regarding medical cost trends. He confidently stated, “UNH is back.”
Considering the gains made on Friday, UNH shares turned slightly positive year to date.
Here is a comprehensive list of the stocks in Jim’s Charitable Trust, the portfolio used by the CNBC Investing Club.
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