We are making a handful of trades on Monday: We are selling 100 shares of Abbott Laboratories at roughly $125.51. Following the trade, Jim Cramer’s Charitable Trust will own 400 shares of ABT, decreasing its weighting to about 1.35% from 1.70% We are selling 100 shares of Danaher at roughly $188.79. Following the trade, the Trust will own 450 shares of DHR, decreasing its weighting to about 2.35% from 2.85%. We are selling 15 shares of Eaton at roughly $376.69. Following the trade, the Trust will own 310 shares of ETN, decreasing its weighting to about 3.20% from 3.35%. We are buying 250 shares of Cisco Systems at roughly $68.24. Following the trade, the Trust will own 800 shares of CSCO, increasing its weighting to about 1.50% from about 1%. We are buying 50 shares of TJX Companies at roughly $124.11. Following the trade, the Trust will own 800 shares of TJX, increasing its weighting to about 2.70% from about 2.50%. Abbott Labs shares have made a nice comeback over the past two sessions, recovering about half of last Thursday’s sell-off in reaction to a disappointing cut to its full-year sales growth outlook . The main issue dragging the outlook was in its diagnostics business, which struggled due to the longer-than-expected “volume-based procurement” program in China, which is part of the government’s national strategy to control health-care costs. It’s a transitory issue, but the company said this program is going to take a couple extra quarters to work through. Given that the issue is likely to persist for several quarters, we’re taking a more downbeat view on the stock and using the recent strength to trim the position. This brings us to Danaher. The company also has a big diagnostics business in China. When the company reports before the opening bell Tuesday, we expect it to acknowledge a similar headwind. An analyst at Jefferies wrote late Friday that they think the ongoing VBP program in China could negatively impact the company’s full-year outlook by an incremental $30 to $40 million, on top of the $150 million hit that is currently baked into guidance. The bar into earnings for Danaher should be much easier than Abbott, since the stock of the former has been horrible this year while Abbott having a solid year into the print. However, we are trimming the position and downgrading our rating to a 2 to protect against the same problem hurting us twice. From these sales, we’ll realize a solid gain of about 10% on Abbott stock purchased in March 2024, but we’ll register a very disappointing loss of about 25% on Danaher stock bought in January 2022. As for Eaton, we are making a small sale to be consistent with what we said Thursday during the Morning Meeting. The stock popped about 5% that day and hit a new record high in reaction to strong earnings from its European peers in the power and electrical equipment space. The news is a positive sign for Eaton’s upcoming earnings report on Aug. 5. That said, we’re taking profits into the recent strength to guard against the possibility that this record rally has already priced in much of the upside. From this sale, we will realize a great gain of about 67% on stock purchased in November 2023. We’re taking some of these cash proceeds to scale deeper into our newest position, Cisco Systems. We called up this networking equipment company from the Bullpen last Thursday to increase the portfolio’s exposure to the technology side of the AI infrastructure buildout (Eaton, GE Vernova and to a lesser extent Dover give us exposure on the industrial side). When Cisco last reported earnings in May, it said it reached its goal of $1 billion in AI infrastructure orders from large tech customers one quarter early. Beyond AI, Cisco’s shift toward subscription-based software is still underappreciated, helping lift gross margins and justifying a higher price-to-earnings valuation. Lastly, we are adding to our position in the off-price retailer TJX, the parent company of TJ Maxx, Marshalls and Home Goods. The stock has dopped about 4.5% since we sold 50 shares in April and about 6% since the company reported better-than-expected first-quarter earnings in May. We like this pullback as an opportunity to pick up more shares. Although the stock’s recent performance has been lackluster, the fundamental story remains strong, with TJX catering to the value-seeking consumer and gaining share from the store closures and struggles at other department stores. (Jim Cramer’s Charitable Trust is long ABT, DHR, CSCO, TJX, ETN, GEV and DOV. 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.
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