We're buying more shares of this industrial company with data center and health-care exposure

Published Wed, Jun 5 202412:33 PM EDT

We are buying 75 shares of Dover at roughly $180. Following the trade. Jim Cramer's Charitable Trust will own 250 shares of Dover, increasing its weighting in the portfolio to about 1.4% from about 1%. Dover shares hit a rough patch this week, falling alongside many other industrials on concerns about the health of manufacturing after the release of soft PMI numbers Monday. We view this weakness as a chance to make our next buy of Dover as we slowly scale into this position, which we started May 28 . Although parts of industrial activity are certainly being impacted by the Federal Reserve's higher-for-longer interest rate policy, concerns about the entire group represent a buying opportunity in Dover because the company has several business lines growing much faster than the broader economy. This momentum will be sustained due to exposure to several mega-themes. The company has a role in the data center buildout to support the rise artificial intelligence computing. Dover makes thermal connectors used in the liquid cooling of data centers, a process growing in popularity due to AI. It also makes heat exchangers, which are used in data centers, HVAC systems and other industrial markets that require higher energy efficiency. Dover's exposure to the health-care industry is promising, too. Specifically, its biopharmaceutical components business is finally inflecting as customers work down excess inventory and biotech funding improves — similar dynamics brightening the outlook for fellow Club name Danaher . Dover's products in this area include flow control valves and ultrasonic sensors. Its CO2 systems business also is benefiting from regulatory tailwinds that are driving the transition toward natural refrigerants in the food retail market. We appreciate the way Dover executives have managed the company's portfolio, divesting non-core businesses with less attractive growth profiles and using those sale proceeds to do bolt-on acquisitions in more attractive spaces to become less cyclical. The Illinois-based industrial also is a Dividend Aristocrat, having boosted its quarterly payout to investors for 68 consecutive years. (Jim Cramer's Charitable Trust is long DOV. 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.