We are selling 165 shares of Best Buy at approximately $86 per share. After Wednesday's trading, Jim Cramer's Charitable Trust will own 600 shares of BBY, reducing its weighting to about 1.5% from 1.9%. Best Buy shares have been declining steadily since October due to concerns about online retail sales and the possibility of higher tariffs on Chinese goods under the new administration of President-elect Donald Trump. There's also a real estate component to Best Buy's business, which needs increased housing turnover to recharge sales of big-ticket items like appliances and home entertainment systems. With mortgage rates rising despite the Fed cutting interest rates, we trimmed our position when Best Buy traded around $90 a share in late October. However, we are selling some Best Buy shares for another reason: discipline. We don't want to break our system of turning hard-earned gains into losses. Some of the problems facing Best Buy, such as stubborn mortgages and AI-powered personal computers that may not be selling as well as initially hoped, may be temporary. However, we can't risk our profits if the same-store sales turnaround story hits a speed bump next Tuesday when the company reports earnings. That's why we're trimming our position even further – making an average gain of about 8% on shares purchased in early 2024. There's one more thing. If there's a trend developing so far this retail earnings season, it's that giant companies — including Walmart as well as club names Amazon and Costco — are winning out and grabbing massive amounts of market share. Target's third-quarter earnings miss is a loss story for stocks, and its shares were punished more than 20% on Wednesday. Not everything is as vulnerable to disruption as off-price retailer TJX Holdings or specialty retailer Williams-Sonoma. But we have to admit that Best Buy competes with the Big Three in electronics. (Jim Cramer's Charitable Trust is long BBY, AMZN, COST, TJX. See here for a full list of stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim takes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charitable fund's portfolio. If Jim talks about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. The above Investment Club information is subject to our Terms and Conditions and Privacy Policy, as well as our Disclaimer. No obligation or fiduciary duty exists or is created by your receipt of any information provided in connection with the Investment Club. No specific results or profits are guaranteed.
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We are taking another cut of the stock under pressure to protect hard-earned profits
