We’re adding to an underappreciated stock and another that’s right for the moment
We’re buying 50 shares of Procter & Gamble (PG) at roughly $143.53 each and 50 shares of Disney (DIS) at roughly $102.96 each. Following Monday’s trade, the portfolio will own 640 shares of PG, increasing its weighting to about 3.27% from 3.02%; and 1,125 shares of DIS, increasing its weighting to about 4.10% from 3.94%. In line with our desire to high-grade our portfolio, we’re putting some more cash to work in P & G as the company is the epitome of what works in a market concerned with slowing growth and inflation. Not only did the company report strong first quarter results but commentary on the conference call also gave us confidence that thanks to investments in innovation, Procter & Gamble has the pricing power needed to protect profit margins. At current stock price levels, we’re provided the opportunity to lower our cost basis and lock-in a roughly 2.6% dividend yield. We believe Disney shares around $100 each simply do not reflect the underlying fundamentals. Outside of the Covid pandemic lows, the last time shares saw this level was at the end of 2018, around the time Disney+ was announced but before anyone got a glimpse of it. Fast forward to today, Disney+ is becoming a must have streaming platform as subscriber numbers are pacing ahead of estimates. But the profit center of the company, the parks, are on fire. The combination of these purchases, one in P & G that works in this environment thanks to the must-use nature of its products and resulting pricing power, and the other in a household name, Disney, that actually is working here at the company level but isn’t getting credit and perhaps doesn’t quite fit the profile for a market interested in health care, staples and energy, speaks to our earlier commentary on importance of balancing a long view with a short focus . (Jim Cramer’s Charitable Trust is long PG and DIS. 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.
