Shortly after the opening bell on Tuesday, we will make a trio of trades: We’ll sell 200 shares of Coterra Energy at roughly $29.31. Following the trade, Jim Cramer’s Charitable Trust will own 3,100 shares of CTRA, decreasing its weighting from 2.7% to 2.55%. In addition, we’ll sell 45 shares of Honeywell at $224.26. After the trade, the Trust will own 200 shares of HON, decreasing its weighting to 1.25% about from 1.5%. Lastly, we’ll buy 10 shares of Eli Lilly at roughly $727.50. Following the purchase, the Trust will own 115 shares of LLY, increasing its weighting to roughly 2.3% from about 2.15%. Now that we are no longer restricted, we are trimming our Coterra Energy position. We indicated on Friday that we would have made this sale if not for our restrictions, which were in effect because Jim mentioned the stock within the past 72 hours on CNBC. Shares of the oil-and-gas producer are off to a great start to 2025, rallying 15.4% thanks to strength in the underlying commodities. The move has flipped this position from a loss to a gain, and after battling Coterra for a long time, we don’t want to give back those profits. We’ll realize a small gain of 1% on stock purchased in April 2022. We’re also trimming our position in Honeywell. Even though we are encouraged by the changes coming to Honeywell — with the company largely expected to announce a breakup on Feb. 6 alongside fourth-quarter results — we are selling our position for two reasons. The first reason is our continued concerns about Honeywell’s fundamentals. When the company reports earnings, we think it is likely that sales and earnings guidance for 2025 will fall short of the consensus estimate due to the slow recovery in its short-cycle businesses. The second reason is concerns about “spin purgatory.” Since the separation news is so well-telegraphed, the announcement is largely priced in. However, it could take a year to get the breakup done, creating some risk that investors lose interest in the stock until it is closer to the completion date. We’ve seen this play out with the DuPont breakup, even though the fellow Club stock trades at a significant discount to its sum of the parts. To hedge against the risk of Honeywell stock becoming stuck in spin purgatory, we are trimming down the position. We will realize a gain of about 19% on stock purchased in 2022. And finally, we are adding to our position in Eli Lilly. The drugmaker’s shares got hit last week after the company preannounced soft fourth-quarter revenue that was entirely due to slower growth in its GLP-1 medicines Mounjaro and Zepbound. Even though the company guided for better-than-expected 2025 revenues, the market focused on the quarterly shortfall — Eli Lilly’s second in a row — and became concerned that the obesity market may not be as big as previously thought. We disagree with this view and point to the billions of dollars Lilly is investing in manufacturing as a sign of confidence in the long-term market opportunity. (Jim Cramer’s Charitable Trust is long CTRA, HON and LLY. 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.
