Investing Club: We're buying more of our newest portfolio stock as market swings intensify

Published Tue, Feb 22 20223:08 PM EST

We are buying 100 shares of Qualcomm (QCOM) at roughly $168. Following Tuesday's trade, we'll own 400 shares of QCOM, increasing its weighting to about 1.72% from 1.29%. We are making our latest QCOM buy and scaling deeper into our newest position — which we started last Wednesday — to improve our average cost basis. As we have said before, the reason why we are moving slowly into this position is that we continue to expect the stock market to remain volatile over the next few weeks. But as volatility picks up, we think QCOM is a great stock to buy into weakness because it's a growth-at-a-very-reasonable-price, or GARP, company — trading at 14x forward earnings — it pays a dividend, and it has exposure to some of the best secular themes in technology like 5G mobile. This purchase fits the theme we discussed in Tuesday's "Morning Meeting" of buying stocks of high-quality companies that recently reported strong earnings and provided upbeat guidance about the future. This is one of our favorite strategies during big market selloffs around earning season because when prices of nearly every stock are moving lower for whatever macro reason, the outlooks you can trust most are the ones from management teams who recently reported. Qualcomm recently reported a fantastic quarter and gave an upbeat outlook for the future, so we know the company is doing very well. Qualcomm has dropped more than 10% since reporting better than expected earnings. (Jim Cramer's Charitable Trust is long 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.

Components are displayed on a circuit board at the Qualcomm Inc. booth at the Mobile World Congress Shanghai in Shanghai, China, on Thursday, June 28, 2018.

Qilai Shen | Bloomberg | Getty Images

We are buying 100 shares of Qualcomm (QCOM) at roughly $168. Following Tuesday's trade, we'll own 400 shares of QCOM, increasing its weighting to about 1.72% from 1.29%.