Shortly after the opening bell, we’ll be buying 100 shares of DuPont at roughly $80 each. Following Friday’s trade, Jim Cramer’s Charitable Trust will own 1,125 shares of DD, increasing its weighting in the portfolio to 2.7% from 2.5%. Stocks were indicated lower Friday as another selloff in European markets spilled over into U.S. trading. Treasury yields were trading lower too, with the 10-year yield near 4.22% after this past week’s cooler-than-expected inflation data. We’re calling the weak intra-quarter update Friday morning from Nucor, which cited lower average selling prices and volumes, as another “brownshoot” to the Federal Reserve’s case to lower later interest rates this year. We’re taking advantage of this weakness by picking up more shares of DuPont around this $80 level, liking the potential upside to our sum-of-the-parts-driven $100 price target. Additionally, we continue to look past concerns that the stock could be stuck in a “spin purgatory” until it gets closer to the breakup. We would never put it past a dealmaker like now-Executive Chairman Ed Breen to find ways to accelerate the value unlock if DuPont’s three parts continue to trade at a significant discount versus peers. In addition, there should be some fundamental upside here as well as the Electronics business benefits from a recovering semiconductor market and Water moves past its de-stocking headwinds. (Jim Cramer’s Charitable Trust is long DD. 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.
Read the full article here
