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We recently published a list of 11 Best Performing Healthcare Stocks to Buy Now. In this article, we are going to take a look at where CVS Health Corporation (NYSE:CVS) stands against other best performing healthcare stocks to buy now.
On April 15, CNBC reported that President Trump’s healthcare-focused executive order brought in a win for the sector. Trump directed his health department to collaborate with Congress to revamp a law allowing Medicare to negotiate prescription drug prices. The announcement seeks to bring a change that the pharmaceutical company has lobbied for. Since the negotiation process is included in legislation, Trump’s executive order cannot implement the change itself. However, it directs Secretary of Health and Human Services Robert F. Kennedy Jr. to join hands with Congress and change it.
CNBC reported that drug makers have been working to delay the eligibility timeline for small-molecule drugs to be available for price negotiations by four years. This typically includes pills and most medications. This goes hand in hand with the 13-year wait until more complex biotech drugs are eligible for Medicare price negotiations.
Trump’s wide-ranging executive order also focuses on slashing healthcare costs. It comes a day after the administration instituted a national security report on the pharma industry. CNBC called the report “a precursor to sector-specific tariffs.”
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Medicare’s negotiating powers have been a subject of contention, as drug makers have opined that they would suppress innovation and have rallied against the time frame for negotiation eligibility for most drugs. The law now allows the government to negotiate prices for drugs with no competition, which includes complex biotech or biologic medications after 13 years on the market, but 9 years for their administration as capsules and pills.
Although they did not provide specifics, White House officials told reporters that other changes to the negotiation process would yield more savings than those attained during the first round under the Biden administration. While the Biden administration negotiated price cuts as steep as 79% for the first ten most expensive drugs to the Medicare program, the Trump administration would negotiate prices for the following 15 medications. This includes Pfizer’s cancer drugs Ibrance and Xtandi, as well as Novo Nordisk’s blockbuster diabetes and weight-loss treatments Ozempic and Wegovy.
We used Finviz to screen healthcare stocks and selected the best performers based on their year-to-date (YTD) performance, as of May 9, 2025. We also included the number of hedge fund holders for each stock as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of year-to-date performance.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Jim Cramer on CVS Health (CVS): “David Joyner’s Stunning Turnaround Continues”
A row of shelves in a retail pharmacy, demonstrating the variety of drugs and over-the-counter products.
YTD Performance: 49.19%
Number of Hedge Fund Holders: 74
CVS Health Corporation (NYSE:CVS) is a health solutions company that operates in four segments: healthcare benefits, health services, pharmacy and consumer wellness, and corporate/other. Apart from being a prominent pharmacy chain, the company is one of the largest health insurers in the United States through its Aetna subsidiary’s operations, ranking it fifth on our list of the best-performing healthcare stocks to invest in now.
On May 1, Michael Cherny from Leerink Partners reiterated a buy rating for the company with a price target of $83.00. The analyst favored CVS Health Corporation (NYSE:CVS) for its positive trajectory, highlighting that its fiscal Q1 2025 results show a promising turnaround.
Healthcare benefits cost trends show stabilization signs, aligning with management’s expectations. Although Aetna’s financials are facing some complexities due to previous period adjustments, the analyst sees the trends as strategic steps to support CVS Health Corporation’s (NYSE:CVS) return to a consistent earnings power. It also has the potential for upward guidance adjustments as trends continue on their stabilization trajectory.
CVS Health Corporation’s (NYSE:CVS) Pharmacy Benefit Management (PBM) segment is also anticipated to outperform, supported by the introduction of preferred formulary options and increased growth in areas like specialty medication, supporting the buy rating.
Additionally, on May 6, Sarah James from Cantor Fitzgerald maintained a Buy rating on CVS Health Corporation (NYSE:CVS) and set a price target of $71.00.
Overall, CVS ranks 5th on our list of the best performing healthcare stocks to buy now. While we acknowledge the potential for CVS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CVS but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
