We’re trimming this health-care stock as it hits new highs Friday

We disagree with the merits of Thursday's downgrade on this stock by UBS, we can't argue against taking some profits.

Newyork Central Post September 27, 2024 2 min read

We are selling 75 shares of GE Healthcare at roughly $93.86. Following the trade, Jim Cramer’s Charitable Trust will own 925 shares of GEHC, decreasing its weighting to 2.5% from 2.72%. After further contemplation since the Morning Meeting , we are trimming our position in GE Healthcare. Although we disagreed with the merits of Thursday’s downgrade to sell from hold at UBS, we can’t argue against taking some profits. The stock is now higher than where it traded before the downgrade and is hitting a fresh all-time high Friday. It’s been an up-and-down 2024 for the health-care equipment maker, but the stock has hit its stride in September. It’s been the second best-performing healthcare stock in the S & P 500 this past month, rallying roughly 11% to put its year-to-date gains at 21%. The strong performance may be due to lower interest rates, since hospitals need financing to purchase big, expensive equipment like MRI machines. And more recently, the stock has been rallying on optimism around an economic recovery in China after the government announced stimulus plans. While these measures are different from the health-care-focused plans the government announced earlier this year, we know from GE HealthCare’s second quarter that the government has been painstakingly slow to doll out funds. This has forced the company to “de-risk” its full-year outlook by removing a recovery in the region from its forecast. But any sign that China has finally gotten its act together to fix its economy will be taken positively. We will realize a solid gain of about 18% on stock purchased in May 2023. (Jim Cramer’s Charitable Trust is long GEHC. 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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