It’s been a wild week on Wall Street following the failures of SVB Financial ‘s (SIVB) Silicon Valley Bank and Signature Bank and subsequent actions taken by regulators and major banks to boost confidence in the U.S. financial sector. The Club followed through on what Jim Cramer laid out last Sunday, using this week’s volatility to opportunistically buy on market pullbacks. In fits and starts, bank stocks were under pressure all week. Our financials Wells Fargo (WFC) and Morgan Stanley (MS) were not immune to the selling. We took no action on either this week. However, with our trusted S & P 500 Short Range Oscillator signaling an oversold market, we did find things to buy every day — high-quality names that are right for the current economic climate. With so many trades, eight stocks in all, here’s a recap for Club members that further explains how our broader view of the market influences our buying decisions. Monday Monday was our busiest day . Before the bell, we decided to put some of our big cash position to work by making three separate trades in luxury beauty brand Estee Lauder (EL), cybersecurity giant Palo Alto Networks (PANW) and oil name Pioneer Natural Resources (PXD). Early in the session, we bought 30 shares of EL following a strong earnings call from Ulta Beauty (ULTA), which reported double-digit growth in its prestige skincare lineup, accelerating growth in makeup and a solid quarter in fragrances. We viewed the Ulta results as a positive read-through to Estee Lauder, which has similar in-demand products. We added 25 shares to our PANW position. We were pleased with the tech firm’s strong fiscal second-quarter earnings beat in late February, specifically booking GAAP profitability over the last four quarters. This achievement makes the company eligible for inclusion in the S & P 500. Two spots opened up when SVB and Signature collapsed. While neither went to Palo Alto, we think it’s only a matter of time before PANW is added to the index. We also added 25 shares of PXD following a decline in the energy markets. We had previously trimmed our position . But we like Pioneer for its strong annual dividend yield and its ability to still generate strong free cash flow in a weaker environment flow due to low break-evens of $39 per barrel for West Texas Intermediate crude, which went on to finish the week around $66 per barrel. Tuesday We again took advantage of Tuesday’s down market early and scooped up shares of construction and manufacturing giant Caterpillar (CAT) after the opening bell. (However, by the close, Wall Street had a major reversal to the upside.) We added 30 shares of CAT to our portfolio, incrementally buying with discipline. It was an opportune market buy with shares of CAT down sharply over the past month. While Wall Street has expressed concerns over the possibility of a slower backlog, we’re sticking with the company because it’s well-positioned to be a key beneficiary of the U.S. government’s massive spending package on infrastructure. Wednesday On Wednesday, the decline in stocks continued. So, we put more cash to work in two Club holdings. Shortly after the opening bell, we bought 75 shares of TJX Companies (TJX). The off-price retailer, which operates T.J. Maxx, Marshalls and HomeGoods is likely to be the shopping destination of choice if the economy continues to slow down and consumer budgets tighten up. For a second day in a row , we scaled into our position in Caterpillar, buying an additional 20 shares, bringing our total CAT position to 310 shares. Over the long run we see strength in the manufacturing behemoth and saw Wednesday’s sell-off, which was sparked by concerns over the health of Swiss bank, Credit Suisse (CS), as unrelated to the strong fundamentals in CAT. Thursday Despite Tuesday’s bounce, the market continued to be oversold Thursday, signaling a buying opportunity in one of our chipmakers. (Wall Street closed Thursday sharply higher) We bought 50 shares of Qualcomm (QCOM). While we trimmed our position in the stock once in January and twice in February , we see the company’s smartphone inventory issues improving and continue to be attracted to its 2.65% annual dividend yield. That’s why we saw Thursday’s volatile session as a chance to scale into our position and upgrade our rating on QCOM stock to a 1. Friday The week’s sell-off resumed on the final trading day of the week, allowing us to make two incremental purchases : one industrial and one energy holding. We bought 50 shares of Emerson Electric (EMR). While we viewed Emerson’s hostile takeover (now friendly) attempt of National Instruments (NATI) as unfavorable, NATI may need to take Emerson’s $53-per-share offer since no second bidder has emerged. We see EMR’s market decline after the takeover news as overblown and view the stock’s valuation as more attractive following a steeper decline Friday. We made another buy of 130 shares of Halliburton (HAL) after shares of the company shed 13% this week as oil prices dropped. While the current environment doesn’t incentivize producers to drill as crude prices dropped, we still think the industry has underinvested, and producers in business will continue to use Halliburton’s technology. We upgraded HAL stock to a 1 . (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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.
Traders work on the floor of the New York Stock Exchange on March 3, 2023.
Timothy A. Clary | AFP | Getty Images
It’s been a wild week on Wall Street following the failures of SVB Financial‘s (SIVB) Silicon Valley Bank and Signature Bank and subsequent actions taken by regulators and major banks to boost confidence in the U.S. financial sector. The Club followed through on what Jim Cramer laid out last Sunday, using this week’s volatility to opportunistically buy on market pullbacks.
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