We’re exiting this energy stock, while adding to our positions in cloud and chemicals names

Posted By: EN Todayon: August 18, 2023In: General Energy News

We are exiting our position in Halliburton (HAL) Friday, selling 1,400 shares at roughly $39.52 apiece. In addition, we will be buying 280 shares of DuPont de Nemours (DD), at roughly $75.25 each, and 185 shares of Oracle (ORCL), at roughly $115.62 each. Following the trades, Jim Cramer’s Charitable Trust will no longer own a position in Halliburton and will own 655 shares of DuPont, increasing its weighting in the portfolio to 1.75% from 1%, and 435 shares of Oracle, increasing its weighting to 1.75% from 1.02%. As Jim signaled Thursday during the Club’s August Monthly Meeting , we are fully exiting our position in Halliburton — realizing a gain of roughly 7% from the sale. While oil-and-gas firms have been on fire of late — and we’ve been enjoying it through our stakes in Halliburton, Coterra Energy (CTRA) and Pioneer Natural Resources (PXD) – we want be more balanced around the energy sector given its recent outperformance. We’ve battled hard for the profits we have in Halliburton, but the stock could get clobbered if concerns over a economic growth push crude oil prices back to the low $70s-per-barel range. West Texas Intermediate crude was mainly flat Friday, trading just shy of $80 a barrel. The sale comes with the market finally in oversold territory, according to the S & P 500 Short Range Oscillator . And our discipline instructs us to gradually make some purchases under such circumstances, as an oversold Oscillator is a good reminder that stocks have been put on sale and it’s time to take out your shopping list. That’s why we are taking about three quarters of the cash raised from the Halliburton exit and using it to add to our two newest positions : DuPont and Oracle . We like DuPont as a way to play the recovery in the electronics-and-semiconductor industry. Following its second-quarter earnings release, DuPont said it has reached the bottom in its semi business, making for an attractive growth story in 2024 as electronics sales rebound. The company also has a history of buying back a significant amount stock, and we expect a new $2 billion accelerated share-repurchase program to be announced sometime over the next month. Meanwhile, Oracle is an emerging cloud-infrastructure play. According to the company, its cloud offering is faster, cheaper and more secure than that of the competition — particularly when it comes to generative artificial-intelligence workloads. The stock trades at a very reasonable valuation of around 20 times earnings, despite the more-than 10% earnings growth management expects to deliver annually. Some other stocks we are looking to buy, but are currently restricted to trade, include Stanley Black & Decker (SWK) and GE HealthCare (GEHC). The extra cash raised from the Halliburton sale will set us up Monday to scoop up shares of those two names. We are also debating adding to our positions in Amazon (AMZN) and Meta Platforms (META). Both companies posted terrific quarters this earnings season but have seen their stocks pull back. (Jim Cramer’s Charitable Trust is long DD, ORCL, GEHC, PXD, SWK, META, AMZN. 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.

Workers walk towards Halliburton Co. “sand castles” at an Anadarko Petroleum Corp. hydraulic fracturing (fracking) site north of Dacono, Colorado, U.S., on Tuesday, Aug. 12, 2014.

Jamie Schwaberow | Bloomberg | Getty Images