We’re selling 25 shares of Procter & Gamble at roughly $176 each. Following Monday’s trade, Jim Cramer’s Charitable Trist will own 325 shares of P & G, decreasing its weighting to 1.75% from 1.9%. Consumer goods powerhouse Procter & Gamble has been a solid performer lately, rallying to new all-time highs in a weak tape for two reasons. First off, fresh concerns about a slowing economy after a couple of soft nonfarm payroll reports have caused a rotation into defensive, recession-resistant stocks like P & G. It’s been a great hedge against the Federal Reserve’s ability to pull off a soft economic landing, which we think will happen but has become a debate as we sit nine days away from the first expected interest rate cut since the tightening cycle began in March 2022. Second, the big drop in the 10-year Treasury yield has made dividend growth stocks look much more attractive. Bonds and equities constantly compete for investor dollars, and stocks tend to look like the better deal when bonds go down in yield (and up in price.) P & G, at current stock prices, offers a 2.3% annual dividend yield. PG YTD mountain Procter & Gamble YTD A continuation of these two trends could certainly push P & G higher, but we’d much rather be sellers than buyers. We do not want to chase the rally because of how expensive on earnings the stock is now at 25x forward 12-month estimates. It looks like those earnings won’t get a boost from China anytime soon after hearing management talk at last week’s Barclays Global Consumer Staples Conference. With its run to new highs, P & G has become a source of funds to buy other companies that have been hit hard and stand to benefit from Fed rate cuts. From this trim, we’ll realize a solid gain of about 20% on stock purchased in May 2022. (Jim Cramer’s Charitable Trust is long PG. 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.
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