We are buying 50 shares of Stanley Black & Decker (SWK) at roughly $83.75 each. Following Friday’s trade, Jim Cramer’s Charitable Trust will own 625 shares of SWK, increasing its weighting in the portfolio to 1.87% from 1.72%. It’s been a painful stretch for stocks lately, and there’s a ton of doom and gloom out in the market as Treasury yields have recently risen to reflect a Federal Reserve that’s willing to keep policy interest rates higher for longer. But after Thursday’s session, in which the S & P 500 suffered its worst day since March, we want to take the other side of the trade and put some of our healthy cash position to work in quality companies at cheaper stock prices. Our sanguine viewpoint is rooted in the bullish call made by market historian Larry Williams on Thursday evening’s “Mad Money.” Remember, Williams warned months ago that the market would hit a rough patch through September. It turned out to be the right call. Now he’s saying we finally have a buying opportunity on our hands based on both seasonality and the cycles he’s spotted that repeat in the market. With that in mind, we are adding to our position in Stanley Black & Decker . As we have written before, despite the impact higher rates have on the housing market, it’s important to remember that Stanley Black & Decker is what we would call a special situation. The company is in the middle of a multiyear turnaround, creating a more streamlined business with an improved supply chain. SWK 5Y mountain Stanley Black & Decker 5-year performance While surging demand during Covid is still taking some time to normalize post-pandemic, management continues to make excellent progress on its cost reduction program and inventory destocking plan. Both were ahead of schedule through the first half of 2023, giving us confidence in Stanley Black & Decker’s ability to earn roughly $5 per share next year. However, as with any turnaround, we understand that sometimes progress isn’t in a straight line. That’s why we like to be compensated for our patience. This is another reason why we like SWK here. The stock sports an attractive 3.86% annual dividend yield right here, paying us while we wait for management’s improvements to take hold and the macro pressures to ease. (Jim Cramer’s Charitable Trust is long SWK. 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.
People walk outside of the New York Stock Exchange (NYSE) on September 05, 2023 in New York City.
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