Here’s a rapid-fire update on all 33 stocks in our portfolio, including those Cramer would buy on dips
Here’s a rapid-fire update on all the stocks in Jim Cramer’s Charitable Trust, the portfolio we use for the CNBC Investing Club. Jim ran through each stock Tuesday during our December Monthly Meeting. Apple : In 2024, revenue from Apple’s services division is poised to take centerstage, which would serve as a reminder to skeptical investors how important the growth of that business has been to the stock in recent years. Next year may also be filled with chatter about Apple’s new mixed-reality headset, but Jim said not to expect commercial success right away even though it’s a high-quality piece of technology. Amazon : Given the online retailer’s more than 80% ascent so far this year, investors may be wondering when, if ever, they’ll get a chance to buy the stock on weakness. That could arrive on a day when sellers react to a headline from U.S. antitrust regulators, pushing the stock down a few percentage points, Jim said. The opportunity also may arise during a market rotation out of standout tech winners, which we’ve seen from time to time this fall. In any case, here’s a deeper look at our thinking around buying on weakness. Broadcom : We trimmed our position slightly Monday after the semiconductor and software firm soared nearly 20% in a single week. Given the lack of obvious catalysts, that’s what we call a parabolic move, which requires our discipline to kick in and book profits. The reasons for long-term optimism remain, including benefits from generative artificial intelligence investments and the recently closed VMWare acquisition . Bausch Health : We may have to take losses in Bausch Health as soon as this year, following many months of legal uncertainty. If it was sold, we wouldn’t buy it back — that fails one test for ownership in the Charitable Trust. Caterpillar : Big picture, Jim likes the industrial companies in our portfolio, which includes this machinery maker. The stock has had a big run lately, up about 16% in December alone, as investors grow more confident that the Federal Reserve is done hiking interest rates. Costco Wholesale : After another terrific quarter , there’s not a ton else to say, except that we’re grateful for the $15 special dividend that will be paid out soon and expect to have a long, happy investment relationship with the retailer. Salesforce : The enterprise software giant is well-positioned for 2024 , as we expect management will remain disciplined on costs, which is good for margins. We also predict that its generative AI offerings will become the de-facto way other companies embrace the much-hyped technology, which could help revenue growth reaccelerate. Coterra Energy : Jim said he’d like to buy more of this stock, but it’s trading pretty close to where we bought Dec. 6 so we’re holding off. We do see value in the stock below its current $26 per share. Wall Street increasingly agrees, with three analysts upgrading the stock to a buy last week . Dupont De Nemours : Dupont’s exposure to the housing market looks better after last week’s Fed meeting, when we learned the central bank expects to cut rates in 2024 more than previously thought. More important is its electronics industry exposure, where CEO Ed Breen has recently seen some green shoots. Its too cheap at current levels, Jim argued. Danaher : The payoff for our patience looms. It’s been a longer-than-expected dry spell for Danaher, Jim acknowledged, but its setup for 2024 is encouraging amid hopes for a thawing in the initial public offering market. IPOs help Danaher’s key customers in the biotech industry get the capital they need to buy Danaher’s equipment. Jim said he still views Danaher as a stock worth buying. Walt Disney : The entertainment giant’s stock is likely to be a grind, but there is at least a clear set of boxes CEO Bob Iger can work on crossing off. That includes free cash flow around $8 billion in 2024 and streaming profitability by the end of next year. Jim added that he’d like to see Trian’s Nelson Peltz gain a seat on the company’s board. Estee Lauder : The cosmetics maker is our second-biggest quandary behind Bausch, a shocking reversal of fortunes for a stock that used to be best of breed. After three terrible quarters, it’s possible the business may be turning around. However, Jim said the magnitude of the miscues combined with management’s apparent failure to recognize how poorly the company is doing may render holding on to shares an exercise in futility. Eaton Corporation : This industrial joined our portfolio on the day of the November Monthly Meeting, and has moved roughly in-line with the broader market since then. We’d like to have a larger position, given the flood of Inflation Reduction Act money expected in 2024. But we’re not sure the market will give us the opportunity to add below our cost basis. If we get a sell-off in January, Eaton is a logical place to look to buy, Jim said. Ford Motor : Few people seem to expect a good 2024, but Jim said it appears possible for multiple reasons tied to its dividend. First, the potential for Fed rate cuts will make Ford’s dividend appear more attractive to investors. Second, Ford’s decision to emphasize hybrids and spend less on unprofitable electric vehicles will help ensure the company can sustain its quarterly payout. Foot Locker : We don’t want to get too positive on a retailer amid a turnaround because it reported one better-than-expected quarter , which sparked a short squeeze in the stock. However, CEO Mary Dillon’s revitalization efforts may finally be starting to show up in the financial results, so we’re willing to let this play out. GE Healthcare : Shares are up nearly 14% over the past three months, which is encouraging for the embattled name. In the new year, we expect to see more activity to establish health-care infrastructure to support a new class of Alzheimer’s therapies as Eli Lilly’s drug is expected to receive regulatory clearance. GE Healthcare, which makes MRI machines used to monitor patients on those therapies, stands to gain from the buildout. Alphabet : Of all the so-called Magnificent Seven stocks, Jim said he’s most concerned with Alphabet due to Google Cloud’s struggles in the company’s late October quarterly report. However, because we took profits in the stock Nov. 27 and other areas like YouTube are performing well, Jim said he feels comfortable staying invested in the tech giant at current levels. Honeywell International : New CEO Vimal Kapur is wisely betting on secular trends around safety and security, punctuated by the firm’s recent $4.95 billion deal for Carrier’s security business, which makes products like electronic locks and fire alarms. Honeywell’s aerospace segment continues to be strong while we await additional portfolio moves that Kapur makes. Humana : Shares are about as cheap as it they have ever been, at less than 15 times forward earnings. This suggests the stock is reflecting investor concerns about a possible uptick in hospitalizations and weariness heading into a presidential election year. Despite its recent drift lower, we’re hesitant to buy on the weakness. This could be a situation where the stock is telling us something. Linde : The industrial gas giant’s speculation-driven volatility last week doesn’t change a thing about its exceptional fundamentals. It’s one of the few industrials with a proven track record of growing in both good and economic times. We’ve routinely needed to hike our Linde price target, and all signs point to needing to do that again soon. Eli Lilly : Deciding when to buy Eli Lilly has been tough lately, given the stock’s significant outperformance in recent years, including 2023. However, we can see buying on a potential pullback, which could materialize in the near term as investors book profits. In the new year, catalysts include the approval of Alzheimer’s therapy donanemab and improved manufacturing capacity to support demand for obesity drug Zepbound and type-2 diabetes treatment Mounjaro. Meta Platforms : It’s been a bit quiet around for the Facebook and Instagram parent lately. Meta’s digital advertising offerings, including through its TikTok competitor Reels, are highly sought after, with AI helping to boost their attractiveness. The biggest problem with Meta is its heavy spending into the money-losing Reality Labs division, though Jim said he’s trusting CEO Mark Zuckerberg will not lose billions on it endlessly. Morgan Stanley : This bank stock has finally gotten the respect it deserves, jumping nearly 15% over the past month. From here, Jim said investors should pay close attention to headlines around mergers-and-acquisition activity. More M & A is good news for Morgan Stanley’s investment banking division and, by extension, its stock. Microsoft : So much is going in Microsoft’s favor right now, including a refresh cycle in the personal computer market and video games now that the Activision Blizzard acquisition is complete. But its work with pioneering AI startup OpenAI is the most exciting of all, Jim said. That extends to Microsoft’s AI assistant product, called 365 Copilot , which is well on its way to becoming a significant revenue stream for the company. Nvidia : Shares of the chipmaker currently trade at 25 times forward earnings, well below their five-year average of roughly 39, according to FactSet. Jim said he’s not sure how the premier growth company of our time can be this cheap. While this could reflect concerns about competition in the AI chip market from AMD or the general sustainability of heavy AI investment, we still sees multiple years of hyper growth ahead for Nvidia. Only Nvidia and Apple have Jim’s “own it, don’t trade it” designation. Palo Alto Networks : The cybersecurity stock is the third-best performing Club stock this year, more than doubling so far in 2023. Nothing has changed about the importance of cybersecurity in this digital world. In fact, high-profile breaches at companies like Clorox are effectively billboards for Palo Alto’s security solutions platform, Jim said. Procter & Gamble : It’s possible that 2024 is a better year for P & G the company than P & G the stock, Jim said. P & G should benefit from lower raw materials costs and the potential for a weaker U.S. dollar. However, investors may be hesitant to pay up for a consumer staples stock. Still, because we run a diversified portfolio, we don’t see a reason to depart from P & G, the best-run staples stock and a Dividend Aristocrat. Starbucks : The coffee chain is tough to own right now, amid concerns about competition in China and unionization efforts in the U.S. In addition, pro-Palestine protests have recently targeted the company. We continue to monitor the various headwinds, Jim said, because if they persist Starbucks may struggle to deliver with its quarterly results. Constellation Brands : Without revered activist firm Elliott Management pushing for improvements at Constellation, Jim said our ownership in the Modelo and Corona parent may have run its course. Elliott’s involvement instills confidence that more value can be created, lifting the stock higher. Stanley Black & Decker : Only three of the 17 Wall Street analysts that cover the toolmaker have a buy-equivalent rating on its stock. However, its most recent quarter was solid and could mark the start of multiple good reports to come, Jim predicted. That could help push the stock considerably higher. Bottom line: The turnaround story is intact. TJX Companies : Over the past month, the off-price retailer has been an underperformer, as hopes around the Fed’s rate-cutting cycle has shifted investor focus elsewhere. However, we recognize that not every stock works at once. At this point, we’re willing to stand pat with the TJ Maxx parent because it continues to have high-quality merchandise that should appeal to deal-hunting shoppers. Wells Fargo : Make no mistake, it has taken CEO Charlie Scharf more time than expected to move away from the regulatory challenges he inherited. At the same time, the stock has shown some signs of life over the past three months, rising roughly 15%. For the year, it’s quietly up more than 20%, outperforming the S & P 500 financials sector, which has climbed 10%. Wynn Resorts : The problem with selling this casino operator, which has the third-smallest weighting in our portfolio, is that once it becomes clear the Chinese economy is turning around, the stock could see a huge run. Consider that it’s also trading below its pre-pandemic valuation on a metric known as enterprise value/EBITDA. That’s why we’re willing to stick with the stock. (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.
Here’s a rapid-fire update on all the stocks in Jim Cramer’s Charitable Trust, the portfolio we use for the CNBC Investing Club. Jim ran through each stock Tuesday during our December Monthly Meeting.
