Every weekday, the CNBC Investing Club hosts a “Morning Meeting” live stream with Jim Cramer at 10:20 am ET. Here’s a recap of Tuesday’s key moments. Opportunity to Buy Caterpillar Confident in Buying Johnson & Johnson Why Buy Before an Overhang? 1. Opportunity to buy Caterpillar Caterpillar (CAT) shares fell 4.2% on Tuesday morning after the company announced earnings before the close. However, the industrial company’s results were strong overall, considering sales increases and margin expansions in all three segments. Caterpillar expects continued year-to-date sales and earnings growth above 2022 levels. Its strong core numbers tell us the market’s reaction has been misguided and presents a buying opportunity for investors. 2. Why We Bought More Johnson & Johnson Shares in Johnson & Johnson (JNJ) fell on Tuesday after a US appeals court Monday dismissed the pharmaceutical giant’s bankruptcy strategy for tens of thousands of lawsuits related to the company’s talc products. Shortly after the bell, we bought 50 shares of Johnson & Johnson (JNJ) at around $161.81 each to take advantage of the market’s overreaction. While the company lost $16 billion in market cap in a single day, the company is unlikely to post an additional $16 billion in losses related to the lawsuit. We continue to like the company’s clean balance sheet and bought the fall so we could enjoy the stock’s eventual rise. 3. Why buy before an overhang? An overhang is an uncertain event that keeps investors on the sidelines, preventing a stock from recovering until clarity is clarified. Humana (HUM) shares rose nearly 5% on Tuesday after the U.S. Department of Health and Human Services released the final rule for Medicare Advantage (MA) risk adjustment data validation audits. The stock’s rally is an example of how buying before an overhang can go your way, and the stock’s immediate surge can be significant. Since the long-awaited Medicare decision wasn’t as bad as feared, it has lifted the cap on HUM’s ability to soar higher. However, it’s important to understand that sometimes things don’t go your way. In this case it worked. (Jim Cramer’s Charitable Trust is long CAT, HUM, JNJ. For a full list of stocks, click here.) As a subscriber to CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling any stock in his charitable foundation’s portfolio. When Jim spoke about a stock on CNBC television, he waits 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS GOVERNED BY OUR TERMS AND CONDITIONS AND PRIVACY POLICY ALONG WITH OUR DISCLAIMER. NO OBLIGATION OR OBLIGATION SHALL BE OR CREATED BY YOUR RECEIVING OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC RESULT OR PROFIT IS GUARANTEED.
Comments are closed.