Two stocks are getting the call-up from our Bullpen stocks-to-watch list. We’re initiating positions for Jim Cramer’s Charitable Trust in BlackRock and CrowdStrike . We’re buying 17 shares of BLK at $1012.44 each. We’re buying 60 shares of CRWD at $305. Following Wednesday’s trades, BlackRock will have a roughly 0.5% weighting in the Trust, the portfolio used for the Investing Club. CrowdStrike will have a roughly 0.5% weighting. BlackRock is the world’s largest asset management manager and leading provider of investment, advisor, and risk management solutions. It offers a broad set of investment products in equity, fixed income, multi-asset, alternatives, and cash across different client types like Institutional, Retail, and ETFs, around the world. About 43% of its base fees come from actively managed products, 42% from ETFs, 8% from Index, and 7% from cash. Blackrock reported a strong set of third-quarter results last Friday. Total revenues increased 15% year over year to $5.2 billion thanks to the positive impact of markets on average assets under management, 5% organic base fee growth, and higher performance fees. And that 5% organic base fee growth was the company’s highest level in the last three years. BLK YTD mountain BlackRock YTD BlackRock lived up to its reputation as a premier asset gatherer, generating $221 billion of net inflows in the quarter – a company record. The company is having a huge year. Through the first three quarters of 2024, net inflows already surpassed the full-year net inflows of both 2022 and 2023. Assets under management stood at about $11.5 trillion at the end of its third quarter, up $2.4 trillion year over year. Profitability was another highlight. The company continues to deliver sustained asset and technology services growth at scale while remaining disciplined on expenses. Adjusted operating margins expanded 350 basis points year over year to 45.8%, leading to adjusted earnings per share of $11.46, well above estimates of $10.40. The company bought $375 million worth of shares in the quarter, slightly reducing its weighted average diluted shares. The company also pays a dividend yield of about 2% and has increased its payout for 15 straight years. One of the company’s biggest strategic pushes right now is in alternative strategies like private markets and infrastructure. Earlier this month, BlackRock completed its acquisition of Global Infrastructure Partners, a leading independent infrastructure fund manager. The company believes this combination “will provide clients access to investment and operating expertise across the infrastructure landscape.” Blackrock believes infrastructure is a $1 trillion market today and will continue to be one of the fastest-growing segments of private markets in the years ahead. The deal brought in an additional $116 billion of client AUM and $70 billion of fee-paying AUM. It also added long-dated, non-redeemable assets to Blackrock’s business, which the company likes because it diversifies its revenue and earnings mix. Management believes these private market assets will positively impact the company’s overall effective fee rate by 0.5 to 1 full basis point. The stock has had a big move this year, gaining roughly 24% but we think the gains can continue. It’s a pretty steady business with market-leading organic growth, margin expansion, plus a dividend and buyback. Also, BlackRock should see an acceleration of inflows into Fixed Income as central banks cut rates, pushing some of the record amount of assets in Money Markets to flow into bond funds and ETFs. CEO Larry Fink addressed the large cash holdings of investors on the earnings call, explaining that “investors will have to re-risk to meet their long-term return needs.” Fink sees opportunities for investors across several structural trends like “rapid advancements in technology and AI, and rewiring of globalization, and the unprecedented need for new infrastructure.” Fink is a thought leader in the banking industry. We’re starting the position off on the smaller side given its recent run to new highs, and we’ll take advantage of pullbacks to add to our position. Our price target is $1,150, which is roughly 24 times the consensus 2025 EPS forecast of $48.47 per FactSet. CRWD YTD mountain CrowdStrike YTD Next up is CrowdStrike, the cybersecurity company led by its co-founder and CEO George Kurtz, who Jim has had on “Mad Money” many times. CrowdStrike specializes in endpoint protection through its AI-native platform called Falcon. The Falcon platform operates entirely in the cloud, allowing for rapid updates, scalability, and ease of deployment. There’s a good whitepaper on CrowdStrike’s website published by IDC that explains the value of the CrowdStrike Falcon XDR platform. It stops breaches. But it also saves time by speeding up threat protection and response while also helping security teams do more with less. It saves money by reducing the cost of cybersecurity – companies can get rid of less effective platforms and consolidate point solutions. The IDC report found that customers realized a $6 return for every $1 invested with a 5-month payback period after they used the Falcon XDR platform. CrowdStrike was virtually unstoppable this year until July 19 when a faulty software update to its Falcon Sensor security software system caused a global problem with computers running Microsoft Windows. It was a major blow for a cybersecurity company, especially one with a pristine reputation. There was a lot of speculation that the outages would hurt their business from customers revolting, resulting in a loss in market share. However, when CrowdStrike reported at the end of August, the results were excellent with revenue up 32% year over year and adjusted earnings per share of $1.04 versus the 97-cent consensus. Even better, the company showed a gross retention rate of 98%, a sign that virtually no business was lost from the event. More recently, the company held its annual Fal.Con conference in September and it seemed to get a great reception, with attendance up 30% versus last year. Microsoft CEO Satya Nadella spoke at the event which suggested the two companies have buried the hatchet. They’ve had this rivalry for years, but ironically the incident brought the two companies closer together. Shares of CrowdStrike may be up almost 40% since bottoming in early August, but it is still down more than 10% from the July 19 incident and about 23% from its closing high of $392.15 on July 1. This could be an opportunity since virtually no business was lost. Our initial price target is $350, which is roughly where the stock traded right before the July 19th outage. We think the stock should return to these levels since virtually no business was lost. You might be wondering if adding CrowdStrike to the portfolio means that we are heading to the exit on Palo Alto Networks . Does having two cybersecurity companies violate our rules about diversification? We typically don’t like to double up in one area, but we think there is room in the portfolio for both of these best-of-breed names because of position sizing. Palo Alto Networks isn’t that big of a position in the portfolio anymore because of all the huge gains we’ve locked in. Cybersecurity is a great area to be invested in. We’re in an elevated threat environment given all the hostilities happening around the world. Artificial intelligence and Gen AI have made bad actors more sophisticated, so corporations need to invest with the leaders in the industry to stay protected. We’re almost a year into the new SEC rules surrounding the disclosure of cybersecurity incidents, and greater awareness of threats has been a tailwind. (Jim Cramer’s Charitable Trust is long BLK, CRWD, MSFT, PANW. 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.
Tag: Monthly Meeting
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These 5 portfolio stocks outperformed the market’s incredible run since our September Monthly Meeting
It’s been a stellar month for the U.S. stock market, driven largely by easing monetary policy. Since the Club’s last Monthly Meeting, investors have celebrated the Federal Reserve’s pivot to its rate-cutting era. The U.S. central bank announced its first interest rate reduction in more than four years on Sept. 18, sending stock benchmarks to all-time highs. Most recently, the S & P 500 and Dow Jones Industrial Average both closed at record levels Monday. The S & P and Dow are up 4.5% and 4%, respectively, since the Sept. 12 monthly gathering. We’ve taken advantage of the market highs. The rate cutting news sent Meta Platforms , Alphabet and Danaher higher, encouraging us to offload shares of each on Sept. 26 in an overbought market. The Club also exited Procter & Gamble on Oct. 8. The reasoning: There’s less need to hold onto traditional defensive names like consumer staples while the Fed is embarking on an easing cycle. We did hold onto our rate-sensitive names like Wells Fargo and Morgan Stanley , which were among the best performers since the last Monthly Meeting. (We sold a little of the latter, more details below). The improving macro backdrop on the back of loosening policy bodes well for Meta Platforms too. Meanwhile, continued investments around generative artificial intelligence boosted shares of Salesforce and Eaton , which rounded out the top five. Here’s a breakdown of what drove gains in each of these five Club stocks since the market close of the September meeting through Tuesday’s close ahead of Wednesday’s October Monthly meeting at noon ET . 1. Wells Fargo: 22% This stock got a boost after the Fed enacted its first rate cut in mid-September, which lifted the entire financials sector. That’s because lower borrowing costs can benefit Wells Fargo by stabilizing its interest-based revenue streams. The firm’s net interest income (NII) took hits during the higher-for-long rate environment as customers sought to park cash in higher-yielding alternatives. It weighed on the bank’s loan growth as well. Wells Fargo’s solid quarterly earnings release on Oct. 11, and subsequent positive Wall Street commentary in the sessions that followed, sent the stock to multi-year highs. We hiked our price target to $66 apiece from $61 on earnings, and reiterated our buy-equivalent 1 rating on the stock. 2. Morgan Stanley: 16.2% Following the Fed’s decision, shares advanced as investors became more optimistic about a soft landing for the U.S. economy. Morgan Stanley benefits from lower rates — and, in turn, a better economy — because it can usher in more Wall Street dealmaking such as initial public offerings and mergers and acquisitions. That’s great news for the turnaround story in Morgan Stanley’s crucial investment banking division. To be sure, we made a small sale of the financial stock on Sept. 19 after its post-Fed pop. That’s because the Club has been debating exiting Morgan Stanley altogether for a potentially better investment banking rebound play like Goldman Sachs. However, we hope to get more clarity on Morgan Stanley’s standing in the portfolio when the firm reports quarterly results Wednesday. 3. Salesforce: 13.8% What caused the double-digit percentage jump in this tech stock? Two words: artificial intelligence. Salesforce hosted its Dreamforce Conference last month, where CEO Marc Benioff touted Agentforce, the company’s AI-enhanced chatbot tools. Shares had their biggest single-day jump in nearly four months, at 5.4%, on Sept. 19 after management detailed more about the flagship offering. A flurry of positive Wall Street chatter followed suit, extending the run even further. Piper Sandler upgraded the stock to a buy rating from neutral on Sept. 24. A week later, Northland Capital Markets also raised its rating on the software maker to a buy-equivalent rating from hold. 4. Meta Platforms: 11.5% The social media giant trended higher after investors saw the unveiling of the Quest 3S , the latest VR headset from the company at the social media giants annual developer conference on Sept. 25. The stock continued to climb on positive signs for the company’s advertising business, which prompted UBS to hike the stock’s price target to $690 apiece from $635. Guggenheim raised the company’s price target to $665 from $600. Analysts at the firm argued that Meta was the top destination for incremental ad dollars, citing recent channel checks. 5. Eaton: 11.3% This industrial name doesn’t have one single catalyst for its outperformance. But increasing data center investments on the back of increased AI adoption, accompanied by upbeat Wall Street research, likely contributed to the stock’s climb. On Sept. 16, Citigroup initiated coverage of Eaton as a buy, sending shares higher. Analysts argued that Eaton will continue to benefit from the buildout of data center facilities, which will in turn increase demand for the company’s power management solutions. Morgan Stanley reiterated its buy-equivalent rating on Oct. 10, arguing that Eaton has a positive setup into earnings season. That same session, analysts at JPMorgan maintained their buy rating on Eaton and increased its price target to $349 apiece from $325. The stock traded near all-time highs on Tuesday. (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.
Angela Weiss | AFP | Getty Images
It’s been a stellar month for the U.S. stock market, driven largely by easing monetary policy.
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Here are our top 5 stocks from mid-November until the eve of December's Monthly Meeting
U.S. stocks have been trending higher since the Investing Club’s November Monthly Meeting as markets celebrate signs of cooling inflation and a seemingly less hawkish Federal Reserve . Watch our December Monthly Meeting at live noon ET and later on video. The S & P 500 has jumped 5.2% since the market close on the Nov. 15 meeting day through Monday’s close. Equities have sustained a rally after the U.S. central bank indicated that three interest rate cuts were on the table next year. A pullback in Treasury yields has also boosted risk assets. Here are the Club’s five top-performing stocks over that stretch ahead of Tuesday’s Monthly Meeting for December. They span three sectors from consumer to tech to banks. 1. Foot Locker Foot Locker came in first for gains since November’s Monthly Meeting. Shares of the company surged 34.2% over the period after posting better-than-feared quarterly results and upbeat commentary from Wall Street analysts. Piper Sandler analyst raised its rating on Foot Locker to a buy from a hold last week, saying that 2024 could be a big turnaround year for the embattled retailer. Analysts see margin expansion opportunities for Foot Locker as the firm’s inventory stabilizes to healthier levels. The stock popped on that positive note, but we’re optimistically cautious. FL YTD mountain Foot Locker (FL) performance year-to-date The stock has dragged this year, like many retailers, as shoppers continue pulling back on discretionary spending amid macroeconomic uncertainty and warnings of a recession. Shares are down 16% year-to-date. It’s a make-or-break quarter for Foot Locker, and we need to see more progress around its long-term prospects to stay in. Still, we’re hopeful on management’s track record around embattled companies, however. CEO Mary Dillon, who overhauled Ulta Beauty , was a key reason we invested in Foot Locker to begin with. 2. Salesforce Coming in second for gains is Salesforce . The Club stock popped 20.1% on the back of a strong fiscal 2024 third quarter . During the earnings call, management delivered a rosy outlook and CEO Marc Benioff named some “green shoots” for the business. CRM YTD mountain Salesforce (CRM) performance year-to-date Overall, we were happy with the cloud software company’s improving margins and growing sales. The stock’s rally continued Monday when Wolfe Research analysts shared a rosy outlook for the company. “This is one I would not take profits in,” Jim Cramer recently said of Salesforce . “I want it to run.” 3. Palo Alto Networks Palo Alto Networks jumped 20.06%, coming in third for gains over the period. In November, the company became the first in the cybersecurity industry to hit a whopping $100 billion market capitalization — a goal long held by management. PANW YTD mountain Palo Alto Networks (PANW) performance year-to-date “The winner and new champion of cybersecurity may actually be Palo Alto,” Jim said after the firm passed the market cap milestone on Nov. 30. The stock has cooled some since but the Club is bullish on Palo Alto compared to peers like Fortinet because its revenue streams are more diversified and less cyclical. Overall, CEO Nikesh Arora said he anticipates even more demand for Palo Alto’s offerings into 2024 as companies continue to face cybersecurity threats and various hacks. “This year has been a phenomenal year for cybersecurity stocks,” Arora told Jim during an interview Monday, adding that more businesses will rely on these kinds of services. “And I think it’s just the beginning.” 4. Broadcom Broadcom placed fourth in terms of gains. The stock has jumped 17.6% since November’s Monthly Meeting. The semiconductor giant was one of the S & P 500’s best-performers last week in a delayed reaction to a solid outlook for recently acquired VMWare. AVGO YTD mountain Broadcom (AVGO) performance year-to-date Since reporting earnings after the closing bell on Dec. 7, Broadcom shares gained 24% as of Monday’s close of $1,147. Last Friday, we increased our price target to $1,200 per share from $1,000. On Monday, we took some profits, selling 5 shares . We’re still big believers in the company and own 75 shares in our portfolio. 5. Wells Fargo Coming in fifth is Wells Fargo , whose stock has jumped 15.9% over the period. This comes amid a broader market rally, which has lifted lagging groups like financials. WFC YTD mountain Wells Fargo (WFC) performance year-to-date We remain upbeat on shares because of its multi-year turnaround plan. The Club sees even more long-term growth prospects once regulators lift the $1.95 trillion asset cap , which should in turn allow the firm to expand its balance sheet and rake in more profits. (Jim Cramer’s Charitable Trust is long FL, CRM, PANW, AVGO, WFC. 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.Traders work during the opening bell at the New York Stock Exchange (NYSE) on August 16, 2022 at Wall Street in New York City.
Angela Weiss | AFP | Getty Images
U.S. stocks have been trending higher since the Investing Club’s November Monthly Meeting as markets celebrate signs of cooling inflation and a seemingly less hawkish Federal Reserve.
Watch our December Monthly Meeting at live noon ET and later on video.
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4 moments from the September Meeting of the CNBC Investing Club with Jim Cramer
Here’s a sneak peek at four moments from the August Monthly Meeting of the CNBC Investing Club with Jim Cramer.
1. How is Apple not a growth company?
2. Don’t bail on Nvidia — still best in AI
3. Cramer avoids emotional bank decision
4. Ford should go it alone in UAW strike
Here’s a full list of the stocks in Jim’s Charitable Trust, the portfolio used by the CNBC Investing Club.
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Here’s a rapid-fire update on all 35 stocks in the Club’s portfolio, including a new buy
Jim Cramer ran through all 35 Club stocks during our September Monthly Meeting on Thursday.
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Jim Cramer’s Investing Club meeting Wednesday: Santa Claus rally, down-and-out buys, Starbucks call, Sunday Ticket
Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Wednesday’s key moments. Santa Claus rally may be here early ‘Buy things that nobody wants’ We still like Starbucks Alphabet’s smart play for NFL package 1. Santa Claus rally may be here early Stocks bounced Wednesday, as all three major U.S. stock indexes rose more than 1.5%. While it’s been a down month for Wall Street, quarterly reports from Nike (NKE) and FedEx (FDX) boosted sentiment Wednesday and sparked optimism that earnings may not be so bad after all. Wednesday’s move comes after stocks broke a four-day losing streak Tuesday and may rekindle hope about a so-called Santa Claus rally . The Santa Claus rally refers to the seasonally strong period covering the final five trading days in a year and the first two in January. 2. ‘Buy things that nobody wants’ The Club made four purchases Wednesday, including in two holdings that declined considerably so far in December: Salesforce (CRM), which is down more than 17% month to date, and Devon Energy (DVN), which has declined over 10% in the same period. “Sometimes you want to buy things that nobody wants,” Jim said during the “Morning Meeting.” Here’s a full recap of our trades Wednesday. 3. We still like Starbucks We still see upside ahead of Starbucks (SBUX) as the coffee chain stands to benefit from China’s economic reopening. That view differs from Jefferies Group, which downgraded the Club holding on Wednesday. The firm took its rating to hold from buy, saying risk/reward for the stock looks “balanced” after climbing 40% from its 52-week low in May. “I regard this as a quizzical downgrade,” Jim said. 4. Alphabet’s smart play for NFL package Club holding Alphabet (GOOGL) is well-positioned to elevate the NFL Sunday Ticket package and bring out some untapped potential at YouTube. According to recent media reports, including from CNBC, the tech giant is in advanced talks with the NFL to bring the league’s Sunday Ticket package to Google’s YouTube. Sunday Ticket is a premium package that allows subscribers to view out-of-market games that otherwise aren’t watchable on local broadcast networks. DirecTV has long held the rights to Sunday Ticket. (Jim Cramer’s Charitable Trust is long CRM, DVN, SBUX and GOOGL. 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.