CNBC’s Jim Cramer said Thursday that investors should look beyond the market’s most active trades and start looking for opportunities in areas that are already beaten down.
“I would like to commend the rest of the market…it has already been discounted and that makes it less vulnerable,” the “Mad Money” host said.
and S&P500 and Nasdaq Composite Cramer warned that parts of the market, particularly technology, could become overheated and susceptible to sharp declines.
Instead, he pointed to what he called the “cold” side of the market: health care stocks, which are undervalued despite strong fundamentals.
Kramer highlighted four healthcare companies that he believes have been overlooked and could help diversify the portfolio.
he likes CVS Healthargued that the company is benefiting from a changing competitive landscape as rivals like Rite Aid disappear and Walgreens downsizes. He said CVS, with its insurance division Aetna and thousands of retail stores, is well-positioned to gain market share as competition wanes.
Kramer also pointed out cardinal healthHe said, “It disappeared here for no reason other than a vicious turnover from medicine.” The company is moving beyond its traditional role as a pharmaceutical distributor into higher-growth services, particularly supporting specialty medical practices.
Another name on his list is johnson & johnson. Kramer highlighted the company’s strong balance sheet and said it has “the best pipeline of blockbuster candidates of any pharmaceutical company.”
Finally he called out united health grouphas recently achieved strong gains. Mr. Kramer said the return of CEO Stephen Hemsley, who served as chief executive from 2006 to 2017, helped stabilize the business and restore confidence in its ability to generate consistent growth.
Kramer’s broader point is that investors need to have “good balance” in their portfolios. After such a strong move in the technology industry to leverage AI, investors may need it soon, he said.
Disclosure: Cramer’s Charitable Trust, a portfolio used by CNBC Investing Club, owns stock in Cardinal Health and Johnson & Johnson.
