This company bought back stock in last month’s software rout. It was a good move
Every weekday, CNBC Investment Club with Jim Cramer publishes Homestretch, an actionable afternoon update just in time for the final hour of trading on Wall Street. Stocks fell on Thursday as U.S. crude oil prices continued to climb toward $100 a barrel due to uncertainty about potential supply disruptions in the Middle East. This inverse relationship between crude oil and stocks has been with us since the start of the Iran war nearly two weeks ago. With the S&P Short Range Oscillator increasingly sold off, we want to hold our nose and do some buying for the portfolio. Our trading restrictions have limited our opportunities, but we have previously shared a shopping list with names we follow closely. Palo Alto Networks purchased the software. The company said late Wednesday that it had added $1 billion to its stock repurchase authority after making an opportunistic purchase last month. The company purchased 6.8 million shares on the open market between February 20 and February 24 at an average price of $147.69. It’s great timing on management’s part, with shares up nearly 13% since then. In late February, we downgraded Palo Alto Networks to 3, meaning the sell-off will strengthen. We still have great respect for Palo Alto Networks and consider it a best-of-breed cybersecurity name. But we didn’t want to continue owning two cybersecurity stocks and went with CrowdStrike for its better growth. However, we have been reluctant to sell Palo Alto on its recent strength as the war in Iran has escalated the cyber threat landscape and reinforced the need for businesses to integrate with the best technology providers to protect their systems. We reported earlier Thursday that Iran-related cyberattacks were on the rise, and this was confirmed in a text message CrowdStrike CEO George Kurtz sent directly to Jim Cramer. “You’re going to see a lot more companies associated with the conflict in Iran being targeted. And as the smokescreen of war continues, China is also stepping up its activities,” Kurtz told Jim. After the closing bell, Adobe, Rubrik, SentinelOne, ServiceTitan and Ulta Beauty report earnings. There are no major quarterly reports set for Friday morning. But on the data side, the Federal Reserve’s preferred inflation gauge — the personal consumption expenditures (PCE) price index — is released before the bell. Durable goods data and the University of Michigan’s consumer confidence and inflation expectations survey will also be released. (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. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.
