We're trimming a recent winner to help pay for our newest position in an overbought market
We're selling 80 shares of Texas Roadhouse at roughly $191. Following Tuesday's trade, Jim Cramer's Charitable Trust will own 450 shares of TXRH, decreasing its weighting to about 2.5% from 2.95%. We're partially offsetting the cash used to initiate a new position in GE Vernova with a trim of Texas Roadhouse to maintain some discipline to the slightly overbought S & P Short Range Oscillator. Shares of the steak restaurant chain have been a strong performer over the past few trading sessions. Since last Friday, the stock has rallied about 10% thanks to a reacceleration in comparable store sales through the first five weeks of the second quarter and a significant de-escalation in the U.S.-China trade war. The gains over this stretch flipped Texas Roadhouse from a loss to a year-to-date gain of roughly 5%, ahead of the broader market's decline of less than 1%. TXRH YTD mountain Texas Roadhouse YTD The same goes with our position in Texas Roadhouse, which we added to twice following President Donald Trump 's "liberation day" of "reciprocal tariffs," including a small one near $150 when the stock market was historically oversold right before the administration announced a 90-day pause on levies. Although the Texas Roadhouse quarter played out as we hoped with comps rebounding as the weather warmed up across the country and a solid uptick in share repurchases, we lowered our price target to $195 to reflect increased margin pressure tied to rising beef prices. With the stock price nearing our new target, we're capitalizing on this strength to lighten up on the position and downgrade the stock to our 2 rating. From this sale, we will realize a small gain of about 2% on stock purchased in early February 2024. (Jim Cramer's Charitable Trust is long TXRH, GEV. 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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
19 minutes ago
- Yahoo
Adobe Stock Slumps as Results Leave Some Waiting for More Signs of AI Success
Adobe shares slumped Friday, as the design software developer failed to impress with its quarterly results, despite topping Wall Street estimates. Several Wall Street analysts indicated Adobe's results didn't suggest enough progress with its own AI offerings to ease worries it could be held back by growing competition and AI disruption. Deutsche Bank said it expects the stock 'to remain range-bound until the company demonstrates more tangible success from AI."Adobe (ADBE) shares slumped Friday, as the design software developer failed to impress with its quarterly results, despite topping Wall Street estimates and boosting its full-year outlook. The stock led S&P 500 decliners by sinking nearly 6% in recent trading to roughly $390, leaving shares down 12% for 2025. "The key investor question remains when (if) AI innovation can move the needle," wrote Morgan Stanley analysts, who added the quarter "brought little to quell the bear concern around AI contribution being unable to reaccelerate growth while bulls must remain patient for encouraging AI metrics to move the needle." Still, the analysts said they are "overweight" on the stock with a $510 target, expecting Adobe AI monetization to ramp up in the next fiscal year. Jefferies analysts, who reiterated a "buy" rating and $590 price target on Adobe's potential growth driven by its AI offerings, echoed the comments, writing that while the firm's earnings showed some AI progress, it was "maybe not enough to appease bears." Jefferies also noted that Adobe's forecast, while higher, would imply a slowdown in growth in the fiscal fourth quarter, though they added they believe it "reflects management's conservatism amid ongoing macro uncertainties." Bank of America, which raised its target to $475 from $424 on Adobe's outlook and AI growth potential, said the company demonstrated "solid execution in a weaker software backdrop," calling it a "break from this reporting season, with most software companies opting not to flow through upside to the full year." Citi analysts, however, were less convinced, citing worries growing competition and AI disruption could hold Adobe back. Citi issued a "neutral" rating for the stock and $465 target. Deutsche Bank analysts, who affirmed their "hold" rating and $475 target, said they "expect the stock to remain range-bound until the company demonstrates more tangible success from AI." Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
27 minutes ago
- Yahoo
UnitedHealth Group Incorporated (UNH) Is a Trending Stock: Facts to Know Before Betting on It
UnitedHealth Group (UNH) has recently been on list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future. Shares of this largest U.S. health insurer have returned +16.1% over the past month versus the Zacks S&P 500 composite's +3.6% change. The Zacks Medical - HMOs industry, to which UnitedHealth belongs, has lost 12.3% over this period. Now the key question is: Where could the stock be headed in the near term? Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision. Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings. We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. UnitedHealth is expected to post earnings of $5.16 per share for the current quarter, representing a year-over-year change of -24.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -11.7%. The consensus earnings estimate of $22.28 for the current fiscal year indicates a year-over-year change of -19.5%. This estimate has changed -10.3% over the last 30 days. For the next fiscal year, the consensus earnings estimate of $25.58 indicates a change of +14.8% from what UnitedHealth is expected to report a year ago. Over the past month, the estimate has changed -10.2%. Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, UnitedHealth is rated Zacks Rank #5 (Strong Sell). The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth. In the case of UnitedHealth, the consensus sales estimate of $111.93 billion for the current quarter points to a year-over-year change of +13.2%. The $449.69 billion and $475.96 billion estimates for the current and next fiscal years indicate changes of +12.3% and +5.8%, respectively. UnitedHealth reported revenues of $109.58 billion in the last reported quarter, representing a year-over-year change of +9.8%. EPS of $7.2 for the same period compares with $6.91 a year ago. Compared to the Zacks Consensus Estimate of $111.13 billion, the reported revenues represent a surprise of -1.4%. The EPS surprise was -0.96%. Over the last four quarters, UnitedHealth surpassed consensus EPS estimates three times. The company topped consensus revenue estimates two times over this period. Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects. While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price. The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued. UnitedHealth is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade. The facts discussed here and much other information on might help determine whether or not it's worthwhile paying attention to the market buzz about UnitedHealth. However, its Zacks Rank #5 does suggest that it may underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
Why Sherwin-Williams Stock Just Dropped
Citigroup analyst Pat Cunningham downgraded Sherwin-Williams stock to neutral today. The analyst prefers RPM International stock in the housing sector. High interest rates, with little chance of that changing soon, are pressuring growth prospects in the housing industry. 10 stocks we like better than Sherwin-Williams › Ask Sherwin-Williams (NYSE: SHW) why its stock price is going down today, and your reply will probably be to ask Citigroup instead. This morning, the investment bank downgraded shares of the paint maker from buy to neutral, and Sherwin-Williams stock is down 3.3% through 12:20 p.m. ET in response. "Housing dynamics" look "suppressed," warns Citi analyst Pat Cunningham in a note covered on today. Interest rates are high, and the likelihood of Federal Reserve cuts that would lower those rates looks slim. (Earlier today, J.P. Morgan's chief economist predicted the next Fed meeting will vote "unanimously" to leave rates unchanged.) In the current economic environment, therefore, Citi says it has little "confidence in a material 2H25 US housing market recovery," nor a "favorable risk/reward" for buying Sherwin-Williams stock at its present price. With its fortunes tied largely to the health of the residential housing market, Sherwin-Williams stock looks pricey at 34 times earnings, a projected growth rate of only 10%, and a meager dividend yield of just 0.9%. A better bet in the housing sector, thinks Citi, might be construction products company RPM International (NYSE: RPM), whose business is less tied to residential. Despite its slower (8%) growth rate, RPM pays a dividend twice as big as Sherwin-Williams' (1.8%). And with its price-to-earnings ratio only 23, RPM stock costs half as much. I'm personally not thrilled with these numbers either (paying 23x earnings for 10% growth doesn't seem much of a bargain). But Citi is right: As expensive as RPM stock looks, at least it's cheaper than Sherwin-Williams. Before you buy stock in Sherwin-Williams, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Sherwin-Williams wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $655,255!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $888,780!* Now, it's worth noting Stock Advisor's total average return is 999% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Citigroup is an advertising partner of Motley Fool Money. Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends RPM International and Sherwin-Williams. The Motley Fool has a disclosure policy. Why Sherwin-Williams Stock Just Dropped was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
