Nice runs in 3 stocks we like long-term give us a chance to trim and raise cash
Taking advantage of Friday’s market rally, we’re selling 50 shares of Eli Lilly (LLY) at roughly $330.30 each, 20 shares of Humana (HUM) at roughly $485.96, and 75 shares of Qualcomm (QCOM) at roughly $143.57. Following Friday’s trades, the portfolio will own 300 shares LLY, decreasing its weighting in the portfolio to 3.60% from 4.18%, 150 shares of HUM, decreasing its weighting to 2.63% from 2.97%, and 700 shares of QCOM, decreasing its weighting to 3.62% from 4.00% Eli Lilly, which was around new all-time highs, has been one of our favorite stocks this year, thanks to the multibillion dollar revenue opportunities it has from tackling obesity, diabetes, and Alzheimer’s. However, with the stock up about 20% year-to-date in a market down almost 20% and its richly priced multiple, we want to be prudent and take funds from this position and look to recycle that cash into stocks of high quality companies that have been beaten up this year. This trim will lock in a great gain of about 34% on stock purchased in October 2021. For Humana, shares were getting a nice pop, also trading towards all-time highs, in sync with as stronger-than-expected quarter and raised outlook from managed care peer UnitedHealth (UNH). We think it’s likely that Humana will follow UNH and beat and raise when it reports earnings on July 27. However, we are making this small trim — at what will be our highest sale price to date — to protect against the possibility that the upside from its upcoming quarter is getting priced in Friday. This trim will lock in a small gain of about 4% on stock purchased in April 2022. For Qualcomm, we’re selling some shares to capture the impressive run the stock has been on over the past few weeks. With the help of Friday’s strong market and an upgrade to a buy rating by analysts at Edward Jones, shares of this semiconductor company were on track to record its eighth positive session in the past nine. As much as we like the company for the long term for its handset relationship with Samsung and diversification into auto and the internet of things, we think that type of a run in what has been a brutal year for semiconductor stocks calls for light trimming. That’s especially since we added to our position twice in May at now lower levels. We will also downgrade our rating to a 2 and will look for a pullback before buying again. We will realize a loss of about 15% on stock purchased in February 2022 (Jim Cramer’s Charitable Trust is long LLY, HUM and QCOM. See here for a full list of the stocks.) 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.
