Here's why we're buying more of this healthcare stock after its Friday sell-off

Published Fri, Mar 15 202410:50 AM EDT

We are buying 200 shares of Abbott Laboratories at roughly $113.06. Following the trade, Jim Cramer's Charitable Trust will own 560 shares of ABT, increasing its weighting to 2.04% from 1.32%. We are taking advantage of Friday's sell-off in Abbott — shares are down more than 4% in morning trading — to increase our exposure to the medical device maker. The overall market is down, but the outsized move in Abbott may well be attributable to a report published by the Federal Trade Commission this week in which the regulatory authority urged the U.S. Department of Agriculture and the Food and Drug Administration to help increase competition in the infant formula space, citing the supply disruptions in 2022. The report isn't all that shocking. After all, the FTC's job is to promote competition. However, it's also not that simple. It's the FDA that determines who is ultimately allowed to go to market, and given how tough the FDA has been on Abbott that barrier to entry for a new competitor is going to be very high. As a result, we don't see this report impacting actual earnings results in any material way, especially not in the near term. That's the kind of decline we want to take advantage of because when news breaks and hits the stock price — but likely not the earnings number — you're getting an actual discount. (Jim Cramer's Charitable Trust is long ABT. 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.