Best Buy sells 165 shares for approximately $86 each. After Wednesday’s trading, the Jim Cramer Charitable Trust will own 600 shares of BBY stock, reducing its weight from 1.9% to about 1.5%. Best Buy stock has been steadily falling since October on concerns about electronics retail sales and the possibility of higher tariffs on Chinese products under President-elect Donald Trump’s new administration. Best Buy also has a real estate component to its business, and it needs to increase its residential turnover to revive sales of big-ticket items such as home appliances and home entertainment systems. Best Buy cut its position in late October when it was trading around $90 a share as mortgage rates rose despite rate cuts from the Federal Reserve. BBY YTD Mountain Best Buy YTD But on Wednesday, we’re selling some of our Best Buy stock for another reason: discipline. We don’t want to break the discipline of turning our hard-earned gains into losses. Some of the problems Best Buy faces may be temporary, such as stubborn mortgages and artificial intelligence computers that are perhaps not selling as well as initially expected. However, we cannot afford to jeopardize our profits even if same-store sales volatility accelerates when the company reports its earnings next Tuesday. Therefore, we will further reduce our position and lock in an average gain of approximately 8% on the shares purchased in early 2024. One more thing. If there’s a trend that’s developed so far this retail earnings season, it’s that big players, including Walmart and club names like Amazon and Costco, are winning and gaining huge market share. It’s about being there. Target’s third-quarter profit slump was a story of stock losses, with the company’s stock down more than 20% on Wednesday. Not all are affected by the disruption, like off-price retailers and clubs with TJX Company, or specialty retailers with Williams-Sonoma. However, we must admit that Best Buy competes with the big three companies in the electronics space. (The terms of the Jim Cramer Charitable Trust are BBY, AMZN, COST, and TJX. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, Jim makes trades. Receive trade alerts before you make them. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
Pressure to protect hard-fought profits drives stock prices further down
