We're buying more of our newest position and a health-care stock we have battled

Published Wed, May 29 20241:44 PM EDT

We are buying 75 shares of Dover at roughly $181.64 and 75 shares of GE Healthcare at roughly $78.31. Following the trades, Jim Cramer's Charitable Trust will own 175 shares of DOV, increasing its weighting to 1.0% from 0.57% and 1,350 shares of GEHC, increasing its weighting to 3.30% from 3.12%. We're dipping into our large cash position to buy more stocks on weakness as the broader market pullbacks on concerns about rising interest rates. We're scaling into our newest name, Dover. As we explained in our initiation Tuesday, Dover is an industrial conglomerate that is finally turning the corner after a couple of years of sluggish orders. After orders flipped positive for the first time in seven quarters in the fourth quarter of 2023, Dover's orders accelerated to 3% in the first quarter of 2024. And management said it expects this positive trend to continue for the rest of the year. Orders are one of the best indicators of future growth for a short-cycle company like Dover. Driving the improvement in Dover's order book is the company's exposure to some of our favorite mega-themes, which were highlighted in its first-quarter earnings presentation . The company makes thermal connectors that are a critical component in the liquid cooling of data centers. It also makes heat exchangers that make heating and cooling performance more efficient. There's health-care exposure, too, with Dover making components for the biopharma industry; as we know from fellow Club holding Danaher , that business is poised to inflect later this year. Dover is also involved in CO2 Systems, where there are regulatory tailwinds driving the transition towards natural refrigerants. We're also nibbling on more GE Healthcare. The stock is up only a few dollars from where it sold off after the company's first-quarter miss on April 30 and down about $15 from its March high. Any time a company falls short of expectations so early in the year, investors will question its ability to meet its full-year objectives. However, we felt better about the outlook after management spoke at a conference a couple of weeks ago. At the event, CFO Jay Saccaro emphasized that the fulfillment delay in the patient-care solutions business — a major drag on its first-quarter results — will be a "one-off isolated incident" that will be resolved in the second half of the year without resulting in any lost sales. The other main issue was GE Healthcare's business in China, where customers delayed some orders as they awaited more clarity about a new government stimulus package. We're taking the long-term view on this issue because the company should see a big influx of new orders once the full details are known. We also bought GE Healthcare on May 8. (Jim Cramer's Charitable Trust is long DOV and GEHC. 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.

Experts from Midland Manufacturing, part of Dover's OPW Global, are conducting Emergency Preparedness Training.

Source: Dover