We’re buying 70 shares of DuPont at roughly $66.76 each, 50 shares of Stanley Black & Decker at roughly $87.96 each, and 75 shares of Starbucks at roughly $93.85 each. Following Wednesday’s trade, Jim Cramer’s Charitable Trust will own: 870 shares of DD, increasing its weighting to 1.8% from 1.66%; 790 shares of SWK, increasing its weighting to 2.15% from 2.02%: and 875 shares of SBUX, increasing its weighting to 2.55% from 2.34%. DuPont: We are buying back the shares sold in early January at roughly $76 apiece as earnings reported last week provide some confidence that things are looking up for the industrial. For starters, management highlighted an improvement in its water business for January, with orders up 13%, including a “chunk” of business in China. That business was down in the fourth quarter. Likewise, we were encouraged to hear its electronics and industrials business has stabilized and should return to growth this current quarter. Remember, electronics represents one-third of the business and is the most important driver of long-term earnings growth. Though the bulk of the recovery will likely come in the back half of 2024, we want to start rebuilding our position now. With this purchase, we are upgrading DD shares to a 1 rating. Stanley Black & Decker : High interest rates are a headwind for this toolmaker, but we don’t see it getting any worse. The Federal Reserve will cut rates later this year. In our recent earnings analysis , we said that lower interest rates will likely spur activity in the housing sector, particularly in the existing home market, which is more likely to see repairing and remodeling from do-it-yourself consumers who have recently been buying fewer tools across the DeWalt, Craftsman, and Black & Decker brands. More importantly, we liked the strong margin and inventory improvement last quarter, which shows the turnaround is working. Rates and the economy are outside of management’s control, costs aren’t. So long as the team continues to execute the things within its control, the company will be set up to thrive when the rate environment improves. Free cash flow was also a positive that supports that healthy 3.7% dividend yield that pays us while we await that turn. Starbucks : Shares of the coffee giant have fallen back to where they were before its most recent earnings . It’s an attractive level given the stock rose 3% in the after-market on a top-and-bottom line miss. To us, that market action showed what happens when the entire market knows the stock is dealing with temporary issues (Middle East protests, sluggish China). Both issues will ultimately prove transient, so we are stepping in and will remain patient. The timing of the rebound may be uncertain but the downside is limited. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
We’re tapping our large cash position to buy shares of these 3 quality companies
Feb 14, 2024
