Here’s our April update on all 31 portfolio stocks, including 3 buys
CNBC Investment Club held its April Monthly Meeting on Thursday with Jim Cramer and portfolio analysis director Jeff Marks evaluating each stock in the portfolio. The debate came a day after the S&P 500 closed at its first record high since late January, capping its dramatic comeback from the Iran war sell-off. The broad index’s war-induced low actually fell one trade after our March Monthly Meeting. We gathered on Friday, March 27th and brought another sales day the following Monday. It has been closed to racing ever since. Throughout the war, Jim urged investors to remain calm and continue investing. The speed and magnitude of this backlash reinforces the traps of throwing in the towel. Honestly, who could have predicted that this rally would come on the day of our call in March? Of course, the war is not officially over. But the market is doing its best to refocus on what companies are doing and saying as first-quarter earnings season approaches. This is the background to Thursday’s meeting. Who knows what May will bring? Now let’s look at what Jim and Jeff said in the order they discussed them. Nike’s big mistake: There’s a lot of buyer’s remorse, but we don’t want to combine it with seller’s remorse. The sportswear giant’s turnaround is a much tougher task than we expected for CEO Elliott Hill. It was wrong to buy more shares in December in response to a wave of insider buying. We’re encouraged by another round this week, but along with Hill and Apple CEO Tim Cook, who serves on the company’s board, we’re not buying. We give Hill another one at bat. If there is another ebb and flow next quarter, we will give up on the sports shoe and clothing manufacturer. Tech heavyweights Apple: Smartphone momentum appears to be continuing in China and the upcoming launch of Google Gemini-powered Siri is a powerful combination. This is a real competitive advantage. Moreover, the foldable iPhone is also coming out. There is no point in buying or selling this stock. Just have it. Amazon: The stock’s comeback rally is a lesson in patience. The emperor had clothes from the beginning. It has taken the market time to realize the power of cloud unit AWS and its online retail business. We also do not comply with his satellite ambitions. Broadcom: We reduced our position in the hot chip maker twice this week. Not because we’re soured on CEO Hock Tan or the AI business, which involves custom chips and networking solutions. The stock had been on a parabolic rise since the March lows, and we wanted room to buy back some shares in the event of a pullback. Alphabet: We experienced seller’s remorse, but we bit the bullet and went back in stock late last year. We’re glad we did. From Google Cloud to YouTube to search to the up-and-coming Waymo robotaxi service, these businesses are growing rapidly. Alphabet probably has more ways to win than any of the big guns in this market. Meta Platforms: Having Instagram parent company here is partly a bet that CEO Mark Zuckerberg’s big spending spree on AI talent will bear tremendous fruit. And we don’t like to bet against Zuckerberg when it comes to making money. Ray-Ban AI glasses are just gravy. Nvidia: Our patience with the leading AI chip stock is paying off. The world is all about compact computing, and while there’s a lot of talk about competition from hyperscalers’ in-house chips, our view is that Nvidia is still best in class. It deserves to be the biggest company in the universe (which it is). Microsoft: The software and cloud giant is showing renewed urgency after a period of underperformance. It has lagged behind competitors like OpenAI and Anthropic in releasing exciting and effective AI tools. We’d like to see the company increase its compute spending and allocate more of its current capacity to Azure rather than its internal research and AI assistant, Copilot. Data center plays GE Vernova: Before the AI boom, the gas turbine business was a terrible place to be. It’s magical now. Electricity demand is unusual, turbines are in short supply and competition is low. This means plenty of pricing power. Not to be missed: If you want to play the nuclear energy trend, GE Vernova has a real job, not a science project. Corning: JPMorgan downgraded the glass fiber optic cable maker on Thursday, essentially saying the company was working too far, too fast. There’s no doubt it was a big winner. Our desire to pursue this stems from the idea that glass fiber is increasingly poised to replace copper wire in data centers. Eaton: Electrical equipment is in high demand in data centers, and we like that it’s going one step further by acquiring liquid cooling company Boyd Thermal. An adjacent business that expands Eaton’s total addressable market in the AI structure. The AI servers give off a lot of heat, and Boyd helps keep them cool. Qnity Electronics: This is another situation where we are looking to generate revenue. But this feature, which was separated from the DuPont conglomerate last fall, is just now being noticed by more and more investors. Qnity’s Taiwan Semiconductor Manufacturing Co. and you can’t manufacture and package semiconductors without the types of advanced materials it provides to companies like SK Hynix in Korea. Industrialist Boeing: The plane maker’s order book is overflowing and it’s poised to take back market share from its only real rival, Airbus. Boeing was an incredibly good company and stock before management got sloppy. With CEO Kelly Ortberg at the helm, this is no longer a concern. Dover: We’ll hear from Dover (and Boeing, for that matter) next week. Even though the latest earnings results were good, we admit we’re getting impatient. We’d like to see CEO Richard Tobin take a few more concrete steps to get the stock moving, such as selling off slow-growth areas and using some of his dry powder for exciting acquisitions. This name could be one of our names on the chopping block to be replaced by a promising Bullpen stock. Honeywell: Long-awaited aerospace production is only a few months away, so we need to hang on to our stocks. The entire company is now worth just under $150 billion. Its aerospace business, which produces electronic systems for planes and the smaller engines that power them on the ground, could be worth more than that on its own if spun off into a separate company. Linde: Shares have paused, but we believe disruptions in helium supplies from the Middle East are a headwind for Linde, which produces gas outside the Persian Gulf. If we eventually start to see better economic growth, Linde will see volume increases to complement price increases; This is a winning combination to beat estimates and raise its guidance. DuPont: We don’t think a reverse stock split is ideal from an optical standpoint, but we are confident in management’s broader strategy. Shareholders will vote on the idea at DuPont’s annual meeting in May. If investors want to dump DuPont, it should be because of concerns about fundamentals. Right now, they’re looking good for DuPont without Qnity, which has greater exposure to global megatrends like water and sanitation. The rest are Costco and TJX Companies: These two are among the only retailers worth owning. As consumers increasingly seek better value, they benefit from inflationary environments. With consistent store expansion and better products, these are enduring growth stories that continue to deliver. There is no need to sell these stocks here. If so, TJX can be purchased here. Home Depot: Our thesis didn’t work, but we didn’t lose all hope. Our worldview is that interest rates will eventually fall and pave the way for the housing market, which should revive this flagging stock. But admittedly, if Home Depot is one of the five stocks you own, there’s likely to be better earnings growth elsewhere, at least in the next quarter or two. Eli Lilly: The pharmaceutical giant’s shares may appear to be stuck, but the long-term story remains solidly unchanged. Lilly’s leadership in GLP-1 therapies continues to be a huge advantage, and its new GLP-1 pill is a game changer. Its competition with Novo Nordisk turned into a big volume game, and Lilly was the clear winner in production capacity. Cardinal Health: Despite a less-than-ideal entry point, Cardinal Health’s story remains strong. The company’s scale in pharmaceutical distribution, combined with its growing specialty pharmacy business, creates a durable platform for long-term growth. While the stock doesn’t yet reflect that potential, it’s currently our favorite stock to buy in the entire portfolio. Johnson & Johnson: Strong results this week vindicated our recent decision to replace Bristol Myers Squibb with this drug stock. It has a great cancer treatment pipeline and opportunities in autoimmune diseases and neuroscience. If we didn’t have trading restrictions, we would probably be looking to increase our position on Thursday. Goldman Sachs: The bank had an excellent quarter on Monday outside its fixed-income trading desk. We doubt they’ll make the same mistake twice. The M&A environment is still mature. Wells Fargo: Unfortunately, after two difficult quarters in a row, we had to send this goal to the penalty area. Have we overstayed our welcome? We still predict that the Federal Reserve’s removal of the asset limit last year will lead to more profits. Enforcement needs to be improved. Capital One: When the credit card provider reports next week, we want updates on the Discover and Brex acquisitions and reassurance that they’ll put the brakes on mergers and acquisitions. Now is the time to start making the most of these deals, not just make more of them. Procter & Gamble: The maker of Tide detergent and Crest toothpaste serves as an important hedge against a potential economic slowdown, even if practice wasn’t ideal under previous leadership. With a new CEO in place, this is a name we wish we had more of. CrowdStrike and Palo Alto Networks: Investors fear these cybersecurity companies will be hurt by AI-generated alternatives. However, more advanced artificial intelligence models will be a major negative for these companies. At the same time, we want to make room for other companies in our portfolio. So our plan is to eventually sell Palo Alto and redistribute at least some of those funds to CrowdStrike. Salesforce: The enterprise software stock still has a way to turn things around, even as doubts build around its ability to compete in an AI-disrupted environment. The next quarter will be make or break. We’ll be watching CEO Marc Benioff’s comment closely in May to gauge whether momentum returns or if further risk remains. Starbucks: We love what CEO Brian Niccol is doing. It closed underperforming stores in the U.S. and entered into a joint venture in China, allowing the company to focus on the U.S. recovery. Traffic and comps are improving despite competition, but margins will take time to recover. A pullback to the low $90s could be an attractive level to buy more. (See here for a complete list of stocks in Jim Cramer’s Charitable Trust.) When you subscribe 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 trading alert before buying or selling a stock in his charitable foundation’s portfolio. 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