We recently published a list of 10 stocks Jim Cramer talks aboutIn this article, we will look at how HCA Healthcare Inc. (NYSE:HCA) compares to other stocks that Jim Cramer talks about.
On a recent episode of Mad Money, Jim Cramer suggested that we may be misreading retail. He argues that the debate over whether consumers are sick, healthy, frugal or stressed may be misguided. According to Cramer, consumer behavior doesn’t change dramatically overnight; people don’t suddenly go from sick to healthy in a quarter. Looking ahead to Friday’s Fed discussion in Jackson Hole, with market averages up 56 points and the S&P 500 up 42%, it’s clear that we need to rethink our views on the state of consumers.
“Maybe we’re looking at retail all wrong. Maybe this whole debate about whether the consumer is sick, healthy, frugal or stressed is just a big pile of crap. The consumer doesn’t change behavior overnight; they don’t get sick and then recover within a quarter. When we think about what the Fed will be discussing in Jackson Hole on Friday while the averages are up 56 points and the S&P 500 is up 42%, we need to rethink the big debate about the state of the consumer.”
Jim Cramer points out that understanding consumer behavior is crucial to predicting when the Fed might cut rates. He explains that the Fed needs to cut rates before the economic situation deteriorates to the point where urgent intervention is required. However, the Fed cannot act when the economy is doing well.
“This debate is central to the market’s need for rate cuts. First, we need to understand that the Fed needs to start cutting rates before the economy deteriorates to the point where it has to rush to fix things. But it can’t act when the economy is doing well. Aggregate retail sales data is inconclusive, so we often try to extrapolate from individual retailer data. Collectively, these retailers seem to suggest that the consumer is fickle and potentially overwhelmed.”
Jim Cramer argues that the current debate about consumer behavior may be misguided. He believes consumers are not as fickle as some claim. Instead, they shop at stores run by successful retail CEOs like Ron Vachris, Doug McMillon, Ernie Herman and Brian Cornell.
“Tonight, I argue that the consumer is not fickle at all. People go shopping, and they shop where great retail CEOs are making a difference, like Ron Vachris at Costco, Doug McMillon at Walmart, Ernie Herman at TJX and Brian Cornell at Target. Those are the places where people shop. The consumer is not thrifty or stingy; he just shops where he prefers to shop, and these great retailers attract him.”
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A team of medical professionals in lab coats and masks meet on a hospital ward.
HCA Healthcare Inc. (NYSE:HCA)
Number of hedge fund investors: 69
Jim Cramer noted that HCA Healthcare Inc. (NYSE:HCA) is currently the fifth-best performing healthcare stock in the S&P 500 and is considered the gold standard among hospital chains. He stated that HCA Healthcare Inc. (NYSE:HCA) stands out as the best-managed hospital chain with a strong presence in key geographies and generates significant free cash flow.
“HCA is now the fifth-best performing healthcare stock in the S&P 500. The hospital chain is the gold standard of its kind. The fundamental success model for HCA? Let me lay it out for you: This company is the best-run hospital chain with a presence in the strongest regions of the country and generates a lot of free cash flow. We know this is a big moment for hospitals, so why not just own the best hospital chain? And yes, HCA is the best.”
HCA Healthcare Inc. (NYSE:HCA) is a good investment choice due to its solid financial performance and strategic growth efforts. In the second quarter of 2024, HCA Healthcare Inc. (NYSE:HCA) achieved a 7.1% increase in revenue to $16.9 billion with an impressive operating margin of 18.7%. This financial stability allows HCA Healthcare Inc. (NYSE:HCA) to invest in expanding its network and return capital to shareholders through dividends and share buybacks.
As one of the largest U.S. healthcare providers, HCA Healthcare Inc. (NYSE:HCA) is actively growing through acquisitions and investments in high-demand areas such as ambulatory surgery centers and urgent care facilities. This growth is consistent with favorable industry trends such as an aging population and increasing healthcare needs. HCA Healthcare Inc. (NYSE:HCA)’s strong cash flow, which exceeded $7.5 billion in 2023, supports its growth initiatives and ability to return value to shareholders while managing debt.
In addition, HCA Healthcare Inc. (NYSE:HCA) has proven resilient during economic downturns, including the COVID-19 pandemic, maintaining stable revenues and earnings. These strengths make HCA Healthcare Inc. (NYSE:HCA) a promising investment with significant growth potential and stability.
Baron Health Care Fund stated the following about HCA Healthcare, Inc. (NYSE:HCA) in its second quarter 2024 investor letter:
“In healthcare providers, revenues remain healthy and labor costs have moderated. We continue to like HCA Healthcare, Inc. (NYSE:HCA), the best-in-class hospital operator with an attractive set of increasingly diversified assets in strong urban markets where it is typically the No. 1 or No. 2 provider. Its strong operating cash flow and underfunded balance sheet provide flexibility for growth investments and returning capital to shareholders.”
Total HCA 4th place on our list of stocks Jim Cramer talks about. While we recognize HCA’s potential as an investment, we believe AI stocks that fly under the radar promise higher returns and do so in a shorter time frame. If you’re looking for an AI stock that’s more promising than HCA but trades at less than five times its earnings, read our report on the cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.
