Jim Cramer’s Charitable Trust recently purchased 300 shares of Coterra Energy at around $26.85 and 25 shares of Constellation Brands at approximately $255.56. This increased the trust’s weighting in CTRA to 2.5% from 2.23% and in STZ to 3.05% from 2.85%. The S & P 500 Short Range Oscillator is currently in oversold territory at minus 6.3%, prompting the trust to deploy some of its large cash position into quality companies like Coterra Energy. The trust sees buying Coterra as a hedge against potential geopolitical tensions in the Middle East, as rising oil prices could benefit the company due to its low cost structure. Additionally, Coterra’s ability to adjust its capital investment between oil and natural gas based on economic conditions is seen as a smart move.
Despite reporting an earnings beat and providing an upbeat full-year outlook, Constellation Brands experienced a pullback of nearly 5% over the past three sessions. The trust views this decline as an opportunity to buy, considering the strong performance of the company’s beer business and the positive outlook for the spring and summer seasons. The trust believes that concerns about interest rates, oil prices, and geopolitics may be contributing to the stock’s decline. The founding Sands family’s conversion of their super-voting Class B shares to regular Class A shares in November 2022 may also be a factor in the selling pressure.
As a subscriber to the CNBC Investing Club with Jim Cramer, members receive trade alerts before Jim makes a trade. Jim typically waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has discussed a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. It is important to note that there is no fiduciary obligation or duty created by receiving information through the Investing Club, and no specific outcome or profit is guaranteed. The information provided is subject to terms and conditions, privacy policy, and disclaimer.
The trust’s decision to invest in Coterra Energy is based on the potential benefits of rising oil prices due to geopolitical tensions in the Middle East. If U.S. oil prices were to reach $95 per barrel, companies like Coterra could see significant gains. Additionally, the trust appreciates Coterra’s strategic capital investment decisions, particularly in increasing its oil investments while reducing natural gas production. The trust sees this as a smart move given the current market conditions and believes that Coterra’s low cost structure positions the company well to benefit from any potential increase in oil prices.
In the case of Constellation Brands, the trust views the recent pullback in the stock price as unjustified, considering the company’s strong performance and positive outlook. The trust believes that the beer business’s momentum and the expected gains in shelf space at retailers for the upcoming spring and summer seasons bode well for Constellation. Despite concerns about interest rates and other market factors contributing to the stock’s decline, the trust sees this as a buying opportunity. By carefully analyzing market conditions and company performance, the trust aims to make strategic investment decisions to maximize returns for its charitable trust portfolio.
