Jim Cramer's Charitable Trust recently executed strategic trades, acquiring 300 shares of Bristol Myers Squibb (BMY) at $55.44 and selling 100 shares of Starbucks (SBUX) at $111.48. The transactions followed the clearing of trading restrictions that had been in place. These restrictions prevented the trust from trading any stock for 72 hours after Cramer discussed it on CNBC TV. With these trades, the trust now holds 1,800 shares of BMY and 1,000 shares of SBUX.
The decision to purchase additional Bristol Myers Squibb shares comes in response to a recent decline in the company's stock price. This drop occurred after the company released lighter-than-expected annual guidance for both its top and bottom lines. Despite this, Bristol Myers Squibb reported a strong fourth-quarter performance, surpassing expectations in both revenue and adjusted earnings per share.
The trust identified several factors contributing to the disparity between Bristol Myers Squibb's guidance and Wall Street's expectations. Notably, the trust pointed to increased pressure from generic competition affecting Revlimid sales and significant headwinds arising from foreign exchange fluctuations. However, the trust remains optimistic about Bristol Myers Squibb's prospects, citing its attractive low price-to-earnings valuation and a 4.4% dividend yield as compelling reasons for their continued investment.
Simultaneously, the trust made a strategic decision to reduce its holdings in Starbucks by selling 100 shares. Starbucks has been experiencing a significant upward trajectory, with its shares rising over 20% since the beginning of the year and more than 40% since Laxman Narasimhan was appointed CEO in August 2024. By selling at this juncture, the trust will realize approximately a 30% gain on Starbucks stock purchased in August 2022.
With these transactions, the trust has adjusted its portfolio weightings. The weighting of Bristol Myers Squibb has increased from approximately 2.25% to about 2.7%. Conversely, the weighting of Starbucks has decreased from around 3.35% to approximately 3%.
The trust remains committed to both Bristol Myers Squibb and Starbucks as long-term investments. The strategic adjustments reflect an effort to capitalize on market conditions and maximize returns while adhering to investment strategies that align with the trust's objectives.