We're taking some profits in a health winner but still see stock as right for this market

Published Wed, Jul 6 202211:32 AM EDT

We're selling 25 shares of Humana (HUM) at roughly $475.65 each. Following Wednesday's trade, the portfolio will own 170 shares of HUM — decreasing its weighting to 2.97% from 3.4%. We're making another trim in Humana, this time at a price about $10 per share higher than our sale last week . As we explained before, Humana is still the type of stock we like in this uncertain environment. The managed-care provider is profitable without economic sensitivity, and the stock trades at a reasonable valuation. These defensive characteristics tend to outperform when the Federal Reserve is forced to aggressively raise interest rates to slow the economy down and stamp out inflation. As much as we like Humana for the long term and believe in its ability to reaccelerate Medicare Advantage growth without sacrificing margins, we have learned this year that we must stay disciplined with our winners and make sure that we are taking profits on their march higher. This market is too volatile to not let some stock go as it pushes higher. Humana hit another 52-week high on Wednesday. Plus, we like the idea of selling something at a high to build up cash and redeploy those funds into the high-quality, profitable companies that got crushed because they are not a fit for the current market and the world's challenges but still have strong multiyear outlooks. We'll lock in a small gain of about 2% to 3% on shares purchased in April 2022, representing a small victory against an S & P 500 that has fallen about 14% over the same period. (Jim Cramer's Charitable Trust is long HUM. 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.

Traders on the floor of the NYSE, June 27, 2022.

Source: NYSE