We're snapping up shares of this consumer staples company for its pricing power

Published Mon, May 2 202212:14 PM EDT

We're buying 60 shares of Procter & Gamble (PG) at roughly $157.19. Following Monday's trade, the portfolio will own 460 shares of P & G, increasing its weighting to about 2.39% from 2.08%. With the market currently oversold — as noted in our earlier trade alert on Facebook and Qualcomm — we want to put additional funds to work. Our thinking is we want to get about an additional 1% of the portfolio to work today; that's 1% of the total portfolio, not 1% of our cash position. This buy should get us close. We can then pause to see if the market can find support. A bounce from here would be great, but if not we will have preserved plenty of cash to take advantage of lower levels on stocks we like over the long term. Our earlier buys were a bit more offensive. We picked up shares of beaten-down names in out-of-favor sectors (technology and communication services) for their highly attractive valuations, especially given the solid earnings reports we got from both Facebook and Qualcomm. This buy of P & G shares is more defensive, targeting a consumer staple that investors favor as inflation fears remain high and recession calls grow louder. (An imminent recession is certainly not our base case). Like Facebook and Qualcomm, P & G is a Club holding that already reported earnings and demonstrated strong execution and an ability to pass costs through to a willing consumer. During the company's earnings call, we learned that while P & G products may sell at a higher upfront price, consumers can actually save money in the long-term thanks to product innovations that make their products a better value on a cost-per-use basis. For example, consumers save money on Tide and laundry detergent because they can use it effectively with cold washing – meaning that while the soap may cost a bit more, they can save on energy costs, a meaningful positive given where energy prices are rising. We want to remind members of what we said the last time we picked up shares of P & G: One of our favorite portfolio management strategies when times get tough during earnings season is to go back and look at companies that already reported good numbers. All three buys this morning have done just that. (Jim Cramer's Charitable Trust is long FB, PG, 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.

A person works with robots at Procter & Gamble's factory in Tabler Station, West Virginia, May 28, 2021.

Timothy Aeppel | Reuters

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