We’re buying 45 shares of Procter & Gamble (PG) at roughly $133.59 each; and selling 100 shares of Wynn Resorts (WYNN) at roughly $59.60 each. Following Tuesday’s trades, the portfolio will own 725 shares of PG, increasing its weighting to 3.52% from 3.31%; and 400 shares of WYNN, decreasing its weighting to 0.87% from 1.05%. We’re using a pocket of strength in Wynn Resorts on Tuesday afternoon to trim our position and high-grade the portfolio into more shares of Procter & Gamble, which was sliding more than 3% on a day where many so-called safety stocks in the consumer staple and utilities sector were in red. As we have discussed before, high-grading means selling and taking a little bit of pain in a position that’s not right in the current financial environment to buy or add to a better quality company that fits our investing mantra. Since the beginning of the year, we’re been seeking out shares in companies that are profitable, return cash to shareholders through dividends and buybacks, and trade at a reasonable valuation. Let’s look deeper at the characteristics of Wynn vs. P & G to explain what this process means. We are selling shares of Wynn Resorts. It trades at 34x estimated 2023, hopefully a more normalized year with less Covid restrictions in Macao. Wynn is a major player in Las Vegas. It also operates in Boston. It does not pay a dividend with a stretched balance sheet, and it’s sensitive to consumer spending and policy in China. We’re realize a disappointing loss of about 52% on this sale. But we’re taking the cash proceeds and buying shares of Procter & Gamble. The stock of this household products company trades at 20x estimated 2023 earnings, cheaper than Wynn. It’s a so-called Dividend Aristocrat that pays a 2.74% dividend and repurchases stock. The company bought back $1.2 billion of stock in its most recently reported quarter. It has very little sensitivity to consumer spending because people don’t stop buying Tide, Downy, toothpaste, or Gillette razor blades in a slowdown. (Jim Cramer’s Charitable Trust is long WYNN and PG. 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.
