We are buying 50 shares of Stanley Black & Decker at roughly $84.38, 25 shares of Linde at $416.58, and 50 shares of TJX Companies at $94.82. Following the trade, Jim Cramer’s Charitable Trust will own: 840 shares of SWK, increasing its weighting to roughly 2.30% from 2.17%; 190 shares of LIN, increasing its weighting to 2.60% from 2.25%; and 800 shares of TJX, increasing its weighting to roughly 2.47% from 2.32%. Here is our thinking behind each trade: Shares of Linde fell more than 6% Thursday after reporting a mixed quarter — sales missed analysts’ estimates while earnings beat — and provided a softer forecast for the current quarter. We believe management’s estimates are conservative. During the post-earnings call, the team said it expected an increase in volumes sold into the electronics end market (which accounts for about 10% of the company’s portfolio and 30% of the backlog) driven in part by the growing demand for AI hardware and data center overhauls. However, this forecast is not factored into its guidance because management only focuses on current economic conditions. The company also has a proven track record of under-promising and over-delivering. It has reported earnings above the high end of its guidance for 15 consecutive quarters. We’re confident Linde will do it again and are taking advantage of the stock decline to rebuy the shares we previously sold higher. Investors also took issue with Stanley Black & Decker ‘s guidance. The tool maker beat on the top and bottom lines Tuesday but reaffirmed guidance instead of raising it. Given the uncertain economy and “mixed demand trends” the company’s management is seeing, the move was prudent. Caution is just not what investors want to hear this earnings season. We view the pullback as a chance to buy more shares. Management is controlling what it can, including costs, which will set it up for the next cycle. In the meantime, we’re being paid to wait with the dividend, which we can lock in at roughly 3.9% with today’s purchase. Shares of TJX Companies are down since peaking at $101 in March. We’re stepping in to buy the pullback in this best-in-class discount retailer. While the economy remains strong, there are signs the consumer is pushing back on price. We’ve heard this from several companies this earnings season. Starbucks said it is feeling the impact of “a more cautious consumer,” while Amazon said “customers are shopping but remain cautious, trading down on price when they can, and seeking out deals.” When consumers push back on price, it doesn’t mean they want lower-quality goods, it means they want a better value — what TJX Companies offers. With this trade, we are upgrading LIN and TJX to a 1 rating and reiterating our 1 rating on SWK shares. (Jim Cramer’s Charitable Trust is long LIN and TJX. 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.
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