One Buy and One Trim Tuesday Morning

Shortly after the opening bell, we will be buying 1,000 shares of General Electric (GE) at a bid/ask of $12.66/12.67. In addition, we will be selling 150 shares of Starbucks (SBUX) at a bid/ask of $88.55/89.00. Following the trades, GE (3,250 shares) and SBUX (500 shares) will represent 1.33% and 1.42% of the portfolio, respectively.

GE

Shares of GE are expected to open lower Tuesday, and we think this is a result of a Wall Street Journal report that said the Trump Administration has weighed halting engine deliveries co-produced by General Electric to China due to fears of reverse-engineering. While this news is something to be mindful of, we think the related weakness is a buying opportunity because airplane manufacturers Boeing (BA) and Airbus (EADSY) are far bigger clients than Coma, which is China's state-owned aerospace manufacturer. Outside this headline we are believers in the turnaround CEO Larry Culp has orchestrated at General Electric through a cleaned-up balance sheet that will transition the company to offense from defense, a stabilized Power business, a much better managed long-term care business, and a strong Aviation business that has navigated Boeing-related uncertainty.

Starbucks

Also, we will trim shares of Starbucks and downgrade our rating to a Two. The stock has managed to crawl back to about $88-89 per share despite the lack of guidance provided with the company's strong fiscal first-quarter results. We have been believers that China-related selloffs in the name were opportunities to accumulate shares of this high-quality company that was firing on all cylinders pre-coronavirus, however, our concern is that if Apple (AAPL) can't make the quarter because of the virus, then sales from China for Starbucks could be a lot worse because those aren't recoverable. Therefore, we think it is right to book profits at this level and wait for a pullback to the low $80s before we buy back shares. We will realize a gain of about 7% with this trim.

Apple

Lastly, we note shares of Apple are expected to open a few percent lower this morning following the quarterly guidance update mentioned above. We'll provide more thoughts on this announcement later today, but unlike SBUX we reiterate AAPL as an own, don't trade. Again, we'll have more to say later, but club members should remember that Apple's huge Services revenue stream should soften some of the blow from what is going on in China. Also, we have the expectation that some of the sales Apple initially anticipated in this quarter will be pushed out to the next quarter, thus implying the full-year picture is relatively intact.

Action Alerts PLUS, which Cramer manages as a charitable trust, is long GE, SBUX and AAPL.