Investing Club: We're trimming this steelmaker near all-time highs, boosting cash for future buys

Published Tue, Mar 1 202211:14 AM ESTUpdated Tue, Mar 1 202211:40 AM EST

We're selling 50 shares of Nucor (NUE) at roughly $132.22. Following Tuesday's trade, we'll own 400 shares of NUE, decreasing its weighting to 1.26% from 1.42%. The stock market remained under pressure Tuesday as the Russian invasion of Ukraine intensified ahead of President Joe Biden 's evening State of the Union address. As a result, we want to be ready for any potential increase in volatility, and we've identified Nucor as a prime candidate to lock in gains and replenish cash levels. Tuesday's sale is inline with the one we made on Friday ( trimming 50 shares of Nucor at roughly $127.87 each ). We said Friday that while NUE has been a big winner for us and remains relatively cheap on earnings (at roughly 7.2x fiscal 2022 earnings estimates), it simply does not pay to be greedy as shares pushed toward all-time highs. With yet another record being reached Tuesday, and shares up roughly 5% from our prior sale, we think it as good a time as any to lock in additional gains. As we noted during Tuesday's "Morning Meeting," that while the current stock buyback plan remains a supportive dynamic for shares, the price appreciation has pulled the dividend yield to below 2%, reducing its ability to support shares by drawing in income-oriented investors. Though we're selling Tuesday, we are on the lookout for buying opportunities and this move in morning trading sets us up to add to positions on potential weakness in the afternoon. The move preserves our slightly elevated cash levels — similar to how things played out Monday when we trimmed AbbVie (ABBV) in the morning and cycled the cash back into Walmart (WMT) later in the day. With this Nucor sale, we will realize a phenomenal gain of about 31% on shares purchased in June 2021. (Jim Cramer's Charitable Trust is long NUE, ABBV and WMT. 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.

Bundles of steel from Nucor Corporation sit for sale at Thompson Building Materials in Lomita, California, on Aug. 30, 2012.

Patrick Fallon | Bloomberg | Getty Images

We're selling 50 shares of Nucor (NUE) at roughly $132.22. Following Tuesday's trade, we'll own 400 shares of NUE, decreasing its weighting to 1.26% from 1.42%.