The Charitable Trust managed by Jim Cramer is making changes to its portfolio, selling its position in Bausch Health and buying shares of Abbott Laboratories and GE Healthcare. The decision to sell Bausch Health was made after the courts ruled in the company’s favor regarding Xifaxan’s patents, but the stock price continued to decline. The Trust believes that the cash tied up in Bausch Health will be better served in Abbott Laboratories and GE Healthcare, as the quality of the portfolio will improve with these trades. Both Abbott Laboratories and GE Healthcare have seen their stock prices decline in the past month, presenting buying opportunities for the Trust.
Abbott Laboratories reported a strong first quarter and raised its outlook for the year, despite facing litigation concerns related to its baby formula business. The Trust sees this as an opportunity to buy into a Dividend Aristocrat on weakness. GE Healthcare’s first-quarter report was not as clean as expected, with the company missing Wall Street estimates. However, the Trust believes that the miss was due to specific factors in China and delays in orders, which will likely be resolved later in the year. Additionally, GE Healthcare is expected to benefit from strong procedure volumes in the U.S. and margin expansion opportunities.
The Trust is also considering buying Disney and Wynn Resorts following recent developments. Disney saw a significant pullback in its stock price due to management’s comments about demand in its theme parks business, which many analysts believe was an overreaction. Wynn Resorts reported a great quarter but is not getting credit for it in the stock market. The Trust is hesitant to add new names to the portfolio without taking something off first, but is keeping an eye on these opportunities. The decision to sell Bausch Health will free up a slot in the portfolio for new opportunities.
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