We’re buying 75 shares of Procter & Gamble (PG) at roughly $142.07 each. Following Thursday’s trade, the portfolio will own 800 shares of PG — increasing its weighting to 4.17% from 3.78%. As called out during out “Morning Meeting” on Thursday, we are putting some of the cash raised earlier this week from selling shares of Chevron and Humana into Procter & Gamble. With the likelihood of a recession increasing, we want to upgrade our portfolio by focusing on those companies with resilient sales. Inflation ran hot throughout the second quarter and poses a risk to profitability for all companies, but as we saw with the prior quarter’s release, Procter holds up very well. The company has the pricing power to protect profit margins since it sells consumer staples that take priority in the after-tax income spending calculation. In other words, consumers will forgo wardrobe upgrades before they give up buying laundry detergent when times get tough. In addition, investments in innovation resulted in a decrease of 20% to 30% in customers trading down to generics in the first quarter versus historical figures. Moreover, that pricing power from stronger products allowed management to raise their fiscal-year 2022 organic sales growth guidance to the 6% to 7% range, up from 4% to 5% previously. Lastly, as we look into the second half of the year, the decline in commodity prices that called in recent weeks bodes well for this being the quarter when margin pressure peaks before easing in the back half of 2022. (Jim Cramer’s Charitable Trust is long 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.
