We will buy 25 shares of Home Depot at about $407 per share and 15 shares of Blackrock at about $1,041 per share. Jim Cramer’s charitable trust will hold 200 shares of HD stock after Tuesday’s trade, increasing its weighting to 2.25% from about 2%. The trust portfolio used by CNBC Investment Club will hold 75 shares of BLK stock following the transaction, increasing its weighting from approximately 1.75% to approximately 2.15%. This is our second trading alert of the day. On Tuesday morning, we raised cash by trimming our position in Broadcom to lock in the triple-digit percentage gains from the stock’s recent parabolic move; we also sold Advanced Micro Devices shares on fundamental concerns. These are sales driven by discipline. But there’s another discipline we must adhere to: the S&P 500 Short Range Oscillator. Technical tools showed the market was increasingly oversold after trading on Monday. According to the oscillator, when the market is oversold, we view broader market weakness as an opportunity to buy shares of quality companies. That’s why we put in the cash. HD YTD mountain Home Depot YTD One quality stock we’ve bought so far this year is Home Depot. The home improvement retailer’s shares have retreated about 6% from recent highs and have fallen slightly since the company reported better-than-expected third-quarter results. We were encouraged by Home Depot’s earnings report, which showed the smallest comparable sales decline in nearly two years. This is a good sign that the business is bottoming out and will see positive changes next year. BLK YTD mountain BlackRock YTD We also increased our position in BlackRock, the world’s largest asset manager. Our most recent acquisition came shortly after the company announced last Monday its $12 billion acquisition of HPS Investment Partners. This is a big deal for BlackRock because it will make it a leader in private credit, one of the fastest-growing areas of finance. After the acquisition is completed, BlackRock will become a top five credit management company with estimated private credit client assets of approximately US$220 billion. Not only does this deal add to BlackRock’s growing expense base, but we think the stock should command a higher P/E ratio in the market as a result. The company’s recent acquisition spree of faster-growing opportunities like HPS and the recently completed Global Infrastructure Partners deal should result in a re-rating of the stock’s price-to-earnings ratio from traditional money managers to alternative managers, which typically trade in obtain higher valuations in the market. (Jim Cramer’s Charitable Trust is long BLK. For a complete list of stocks, see here.) As a subscriber to Jim Cramer’s CNBC Investing Club, you’ll find Jim Cramer Receive trade alerts before making a trade. Jim waits 45 minutes after sending a trade alert before buying or selling stocks in his charitable trust portfolio. If Jim talked about a stock on CNBC TV, he would wait 72 hours after issuing a trade alert before executing the trade. The investment club information above is subject to our Terms and Conditions and Privacy Policy and our Disclaimer. No fiduciary duty or obligation is created or created by any information you receive in connection with the Investment Club. No specific results or profits are guaranteed.
