We're buying more of 2 stocks, deploying some of our cash pile in an oversold market

Published Mon, Aug 21 20239:13 AM EDTUpdated Mon, Aug 21 202310:27 AM EDT

Shortly before the opening bell, we announced we'll be buying 100 shares of GE Healthcare (GEHC) at roughly $68.89 each, and 150 shares of Stanley Black & Decker (SWK) at roughly $90.10. Following Monday's trades, Jim Cramer's Charitable Trust will own 950 shares of GEHC, increasing its weighting to 2.3% from 2.06%, and 400 shares of SWK, increasing its weighting to 1.27 from 0.8%. We're putting a little more of our big cash position to work Monday into the oversold market. Following Friday's muted session, the S & P Short Range Oscillator came in at minus 4.72%. As a reminder, anything more negative than minus 4% indicates a market that is oversold. Whenever this technical indicator reaches this level, our discipline is to gradually buy stocks of high-quality companies. Even though it's possible that stocks could continue to trend lower and the Oscillator becomes more oversold from here, we aways believe the Oscillator serves as a good reminder that stocks have been put on sale and it's time to do some buying in stages. GEHC YTD mountain GE Healthcare YTD performance We're picking up more shares of GE Healthcare as we are steadfast in our view that the recent decline in the stock price does not properly reflect the company's improving fundamentals. The company reported a strong quarter in late July, beating expectations on both the top and bottom lines with momentum in new orders that were much better than peers. Management also about opportunities to expand margins over the next few years and highlighted how the launch of new Alzheimer's treatments will be a meaningful tailwind to its business. Although the stock has done nothing but slide since the start of August, we are encouraged by how it's starting to get more support from Wall Street. Wells Fargo initiated coverage on the stock last Wednesday, starting GEHC with an overweight (buy) rating and a $90 price target. Wells Fargo thinks GEHC will grow its earnings per share (EPS) at a double-digit compound annual growth rate in 2023 through 2025, leading to a current valuation that looks attractive versus peers. SWK YTD mountain Stanley Black & Decker YTD performance We're also adding to our position in Stanley Black & Decker , the industrial tools and household hardware manufacturer that's turning itself around. A few weeks ago, Stanley reported a better-than-expected second quarter that showed it was ahead of plan on its inventory reduction program and cost savings initiative. The combination of the two should help the company enter 2024 with a clean slate, positioning them to earn somewhere between $4 to $5 per share from the $1 it's expected to earn this year. As we wait for the turnaround to play out, Stanley's 3.6% annual dividend yield is an attractive payment that compensates us for our patience. (Jim Cramer's Charitable Trust is long GEHC, SWK. 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.

People walk near the New York Stock Exchange on July 18, 2023 in New York City

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