Shortly after the opening bell, we are selling 50 shares of Danaher at roughly $256.35. Following the trade, Jim Cramer’s Charitable Trust will own 525 shares of DHR, decreasing its weighting to about 3.65% from about 4%. Danaher, Thermo Fisher , and the life sciences and diagnostic tools group are trading nicely higher Tuesday on an encouraging data point from a European peer. Shares of Sartorius , a leading German bioprocessing company, jumped more than 10% after it reported strong fourth-quarter earnings Tuesday morning. The company also noted a sequential acceleration in bioprocessing order growth, a great sign that the industry is finally returning to normal after a long stretch of inventory destocking. Sartorius’ update is potentially a very good sign for Danaher ahead of its earnings report Wednesday before the opening bell. However, we are trimming our position and downgrading our rating on Danaher shares to a hold-equivalent 2 into this strength due to its portfolio weighting. Since late October, we’ve added to Danaher on five occasions — starting around $255 a share, all the way down to $230 in November and then, most recently, at around $240 just two weeks ago . The result is that we’re now carrying too much stock, and shares have climbed nearly 9% over the past month. We’ll still own plenty of stock into earnings in case Danaher offers an upbeat view of the bioprocessing market, but this sale will provide us some protection should management give a more cautiously optimistic guide. We will realize a loss of about 6% on stock purchased in January 2022. Another factor behind our decision to trim Tuesday is the S & P Short Range Oscillator, which showed the market became even more overbought after Monday’s session, going to 7.7% from 5.61%. AI-related tech stocks and industrial capital expenditures beneficiaries may have sold off hard, but there was plenty of strength in other areas of the market like health care . When the S & P Oscillator is this overbought, our discipline is to trim some position and raise cash to protect against a marketwide pullback. (Jim Cramer’s Charitable Trust is long DHR. 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.
We’re lightening up on a rallying stock that’s grown too big in our portfolio
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Andrew Kelly | Reuters
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