We’re buying 50 shares of Starbucks (SBUX), at roughly $97.28 apiece. Following Wednesday’s trade, Jim Cramer’s Charitable Trust will own 650 shares of SBUX, increasing its portfolio weighting to 2.36% from 2.18%. Starbucks stock has fallen roughly 15% since the start of May, to around $98 a share. With Wednesday’s purchase, we’ll be buying back 50 of the 100 shares we trimmed for a 31% gain in late April. The slide in Starbucks shares began after the company failed to raise its full-year guidance when reporting solid quarterly earnings at the start of the month. But now management’s conservative outlook looks wise, given China — a key market for the coffee maker — is currently dealing with another wave of COVID-19 infections amid a sluggish economic rebound. Still, we think the latest Covid surge won’t structurally change the growth story for Starbucks in China over the mid-to-long term. Our purchase comes during early market declines Wednesday, with the S & P 500 down around 0.55%. While the broader market is not technically oversold, the S & P 500 Short Range Oscillator would likely provide a more oversold reading if the market weren’t being propped up by the recent strength in technology and artificial intelligence-related stocks. Names like Amazon (AMZN), Microsoft (MSFT), Meta Platforms (META), Nvidia (NVDA), Apple (AAPL) and Alphabet (GOOGL) — all Club holdings — are so large in market capitalization that it’s hard for the rest of the market to rally because they suck in so many investment dollars. It’s hard to deny how powerful the rallies have been in tech stocks this year thanks to AI, but we question how long the divergence with the rest of the market can continue. In that vein, we trimmed two of our tech positions Tuesday morning to raise some cash. Today, we’re looking for opportunities in quality companies that have been crushed of late, including Starbucks. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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.
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