2 takeaways from our daily meeting: Semiconductors, Danaher’s earnings beat
Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Thursday’s key moments. Semiconductor strategy Judge stocks on the homework 1. Sticking with our semiconductor strategy Semiconductor stocks climbed Thursday on the back of earnings beats from International Business Machines Corp. (IBM) and Lam Research (LRCX), with the broader market also rallying. The S & P 500 was up 0.76% in midmorning trading. The Club’s chip holdings — Advanced Micro Devices (AMD), Nvidia (NVDA) and Qualcomm (QCOM) — all soared on the news. Regardless, we don’t regret our decision to trim our semiconductor stocks earlier this month. We chose to sell some shares in order to reduce our exposure to new U.S. export controls limiting chip sales to China and a broader decline in the semiconductor space. However, we didn’t fully exit our positions because the companies we hold are solid businesses. “You keep some on if something is good, but you do not press the bet after you sold something,” Jim Cramer said Thursday. 2. Judge stocks on the homework Another investing strategy that drives our decisions is to judge a stock based on the homework, not the action. What we mean by that is that we don’t sell a stock simply because it’s down. We examine its earnings reports , we listen to the earnings conference calls, we read up on the news, and more. Case in point: Club holding Danaher (DHR) on Thursday reported a beat in revenue and earnings for the third quarter. But the stock dropped almost 2%. This may be because German competitor Sartorius said Wednesday that its business was slowing and inventory levels were high. Nonetheless, we don’t believe Danaher’s stock should have fallen on the back of what was an excellent quarter. Danaher said it hasn’t seen much double ordering and is working closely with customers to make sure they have the right inventory levels. Moreover, this is a high-margin business with a strong long-term growth outlook, a result of increased investment in biologics and genomic medicine. We remain bullish on the stock long term, as the homework suggests the company will continue to do well. (Jim Cramer’s Charitable Trust is long DHR, AMD, NVDA, 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.
