Jim Cramer says buy Eaton if you don’t own it after its puzzling post-earnings drop
Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Tuesday’s key moments. U.S. stocks declined Tuesday, the last day of April, as Wall Street digested another worrisome inflation report. The employment cost index, a measure of wages for civilian workers, came in hotter than expected — one day before the Federal Reserve’s interest rate decision. The S & P 500 was headed for its first losing month since October. Jim Cramer said investors should not sell based on macroeconomic uncertainty. “We can be stock pickers here, but we have to have companies that beat” on earnings, he added. GE Healthcare was not one of them. Shares plunged 12.5% after the medical equipment company posted a disappointing quarter. Despite misses on earnings and revenue, the Club believes a sell-off of this magnitude is an overreaction. Management maintained its full-year outlook, for example, and still expects accelerated growth for the rest of 2024. “I was shocked that it could be this bad,” Jim said, adding the stock has been a “learning lesson” for the Club. Instead of holding out for a run higher, we should’ve held our discipline and trimmed our GEHC position sooner when shares were up. Eaton stock fell 4% on Wednesday despite a better-than-expected earnings release. Management raised full-year guidance on continued strength in the firm’s data center business. The industrial stock’s decline presents a buying opportunity for new investors, Jim said. “If you don’t own it, you’re going to have to buy something,” he added. “Everything was about as perfect as you can get this quarter.” Eaton shares were up earlier in the session. They hit an all-time high before pulling back. (Jim Cramer’s Charitable Trust is long GEHC, ETN. 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.
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