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Selling Tool Maker, Adding to Shipper and a PBM

Locking in gains to close one position and beef up a pharmacy benefits manager.
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I am going to sell the remaining 600 shares of Stanley Black & Decker (SWK) at $67.18 and buy 100 shares of UPS (UPS) at $68.78 and 100 shares of Express Scripts NASAQ at $55.96 after you have received this Alert.

As I indicated in the Weekly Roundup, I would continue to trim SWK into strength, lock in the gains and further diversify into other areas of the fund.

UPS is a blue chip logistics company with a strong, competitive advantage in its systems. It also generates strong cash flow and will return over $2 billion this year in share repurchases. As oil comes down, the pressure to its costs go down. It also has an attractive yield and its multiple at 14.8x is below its historical average of 20x.

After selling ESRX in the upper $60s, I am going to begin to build this stock back into the fund as the premier pharmacy benefits manager in the industry. A few notable positives in the past few weeks have me more bullish with WellPoint's NYSE acquisition of CareMore (adding 40,000 senior lives and potentially 800,000 annual prescriptions), which will be put into ESRX's platform. The acquisition will help overall volumes and the $1.75 billion accelerated share repurchase program, which gives confidence to the earnings estimates of $3.20 a share for this year. Shares trade at 18.2x estimates, which is a discount to its historical range.

After the trades I'll be out of Stanley, own 900 shares of UPS, or 2.11% of the portfolio, and own 1,400 shares of Express Scripts, or 2.68%.

Regards,

Jim Cramer, Stephanie Link, and the Research Team

DISCLOSURE: At the time of publication, Cramer was long UPS, ESRX.

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James J. Cramer is a Markets Commentator for TheStreet and CNBC, as well as co-founder of TheStreet. TheStreet is a publisher. Cramer graduated magna cum laude from Harvard College, where he was president of The Harvard Crimson. After receiving his J.D. in 1984 from Harvard Law School, he joined Goldman Sachs, where he worked in sales and trading. In 1987, he left Goldman to start his own hedge fund. While he worked at his fund, Cramer helped start Smart Money for Dow Jones and then, in 1996, he founded TheStreet.com.

Stephanie Link is the director of research & vice president of strategy for TheStreet. She is the co-portfolio manager for Action Alerts PLUS and works daily on the strategy and stock picks chosen for the portfolio. Stephanie is also responsible for recruiting talent for the paid sites including options, technicians and fundamental contributors. Prior to joining TheStreet, Link worked on Wall Street for 16 years. She spent nine years at the Prudential Equity Group as a managing director in U.S. institutional sales and as the New York sales manager covering top national accounts. She was the managing director of equity research in her final year at the firm. Prior to that position, she worked at Dean Witter as an institutional sales person for six years. Link's investment specialties include large-cap core stocks as well as value ideas.