We’re always scanning the market, looking for opportunities to deploy capital as prices come down. With our expectation for more volatility ahead as the debt ceiling debate picks up, we’re waiting for the market to get into oversold territory before we start putting the bulk of our 10% cash position to work. Remember, when the S & P 500 Oscillator flashes oversold, and it’s getting very close, we look for bargains. After all, Wall Street is coming off a down week for the Dow and the S & P 500 and starting off Monday only modestly higher. With that in mind, we never want to ignore any possible opportunities the market is giving out. So, here are some thoughts on a couple of stocks in the portfolio. PANW YTD mountain Palo Alto Networks YTD Palo Alto Networks (PANW) shares fell more than 4% at one point Monday afternoon to a session low of $190.67, and we can’t find any reason for the decline. Taking a look around the market, some of the other big cybersecurity players like CrowdStrike (CRWD), Zscaler (ZS) and Fortinet (FTNT) were higher, making the drop in Palo Alto even more quizzical. The selling might be nothing more than some short-term profit-taking after Palo Alto rallied over 8% in last week’s struggling market. About half of those gains came last Monday after Zscaler preannounced a strong quarter and raised its full-year outlook. It’s been a mixed picture for the cybersecurity cohort lately, with Tenable (TENB) and Cloudflare (NET) putting up quarterly duds, while Zscaler was great. We can’t say for certain how Palo Alto is doing until it reports earnings after the closing bell on May 23, but it will likely be more in the Zscaler camp given its product leadership and management’s success at balancing growth with profitability and margin expansion. While we’re always hesitant to violate our average cost basis (meaning buy above it) because that’s our investment discipline, a decline like this on no news is tempting. It could be an opportunity for those who have been waiting to get into the stock. Our cost basis on PANW is $177.68. We have a 1 rating on it. Checking in on our energy producers, we debated Monday morning about adding to our positions in either Coterra Energy (CTRA) or Pioneer Natural Resources (PXD). We ultimately decided against pulling the trigger because both stocks were up and trading close to our last purchase. In the volatile energy sector, paying near recent prices and on up days hasn’t been a winning strategy. The real nasty days — when the commodities, oil and/or natural gas get crushed — are the times we want to be more opportunistic. We’ll get more interested in PXD if it falls to $200 and CTRA in the low $20s. Both stocks have 1 ratings. HON YTD mountain Honeywell YTD Here’s one more name we thought about buying: Honeywell (HON). Shares of this aerospace-focused industrial giant were up slightly Monday. But it’s been a disappointing 2023 for Honeywell with shares down roughly 9% year to date. We see the pullback this year as an opportunity for investors to start a position, and we are upgrading our rating to 1. Honeywell’s business has been resilient to the uncertain macroeconomic trends, leading to a clean beat and raise during the first quarter — thanks in part to the strength in the red-hot aerospace market. There’s a CEO transition at play here, with Vimal Kapur taking over for Darius Adamczyk on June 1, but Kapur will look for ways to create value for shareholders by reshaping the Honeywell portfolio in the direction he wants to take it. (Jim Cramer’s Charitable Trust is long PANW, CTRA, PXD, HON. 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.
Arora Nikesh, Palo Alto Networks CEO & Chairman at the WEF in Davos, Switzerland on May 23rd, 2022.
Adam Galica | CNBC
We’re always scanning the market, looking for opportunities to deploy capital as prices come down.
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