The article discusses the recent trades made by Jim Cramer’s Charitable Trust, which include buying 300 shares of Coterra Energy at around $26.85 and 25 shares of Constellation Brands at roughly $255.56. Following these trades, the fund’s holdings in CTRA will increase to 2,900 shares, with a weighting of 2.5%, and in STZ to 375 shares, with a weighting of 3.05%. With the S & P 500 Short Range Oscillator indicating oversold territory at minus 6.3%, the market is seen as a level that calls for utilizing the large cash position. The trust’s discipline dictates that when the S & P Oscillator is this oversold, it’s a sign that equities have dropped quickly, prompting them to consider quality companies more opportunistically.
One of the companies they are investing in, Coterra Energy, is seen as a hedge against potential geopolitical tensions in the Middle East that could lead to a rise in U.S. oil prices to $95 per barrel. If this were to happen, companies like Coterra could benefit greatly, given their low-cost structure. On the other hand, if tensions ease and oil prices drop below $80 per barrel, the inflationary pressures on the economy could ease, benefiting other stocks in the portfolio. The trust appreciates Coterra’s ability to adjust its capital investments between oil and natural gas based on economic conditions, making their decision to increase oil investments while reducing natural gas production a smart move.
In the case of Constellation Brands, the recent pullback in the stock price over the past three sessions, despite reporting an earnings beat with a positive outlook, does not make sense to the trust. The beer business of Constellation has been performing well, with strong sales growth and depletions exceeding expectations. The stock has been negatively affected by concerns about interest rates, oil, and geopolitics pulling the broader market lower. The trust sees this pullback as a buying opportunity, especially after a strong quarter and positive guidance.
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