We're taking profits in an industrial at a 52-week high and buying more of another

We are buying 125 shares of DuPont at roughly $80 and selling 85 shares of Honeywell at roughly $210.74. Following the trades, Jim Cramer’s Charitable Trust will own 1,025 shares of DD, increasing its weighting to 2.50% from 2.20%, and 500 shares of Honeywell, decreasing its weighting to 3.25% from 3.75%. We added to our Honeywell position in February and April in the $190s and near its 2024 lows when many counted out the industrial conglomerate. With the stock now trading at a new 52-week high of $210.88 on Friday, we are booking profits. We’ll realize a gain of 34% on stock purchased in August 2020. Shares got a jolt this week — gaining roughly 4% versus the S & P 500’s roughly 1.5% gain — after the company announced it completed its roughly $5 billion acquisition of Carrier’s Global Access Solutions business a few months earlier than expected. Management also raised its full-year adjusted per share earnings outlook Monday to reflect how it accounts for acquisition-related intangible assets and other acquisition-related costs, which it argues will help investors better compare its performance versus peers. We’ve always liked this acquisition and disagreed with the market’s initial negative reaction to the news in December. We’re pleased to see the stock up about 8% since then. However, for Honeywell to really break out from here, we believe the company must do more portfolio reshaping to speed up growth and improve margins. Until we learn what management’s next move is, we are moving our rating to a 2. We’ll take a chunk of these sale proceeds to buy more DuPont, which has more upside to our sum-of-the-parts-driven $100 price target. After DuPont announced a plan to separate into three companies last month, we’ve heard some on Wall Street argue the stock could be stuck in a “spin purgatory” until it gets closer to the breakup. As we said last Friday on the Homestretch , we understand how a breakup 18 to 24 months away could scare off some investors. However, we would never put it past a dealmaker like now-Executive Chairman Ed Breen to find ways to accelerate the value unlock if the stock continues to trade at a significant discount. (Jim Cramer’s Charitable Trust is long HON and DD . 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.

We added to our Honeywell position in February and April in the $190s and near its 2024 lows when many counted out the industrial conglomerate. With the stock now trading at a new 52-week high of $210.88 on Friday, we are booking profits. We’ll realize a gain of 34% on stock purchased in August 2020.

Shares got a jolt this week — gaining roughly 4% versus the S&P 500’s roughly 1.5% gain — after the company announced it completed its roughly $5 billion acquisition of Carrier’s Global Access Solutions business a few months earlier than expected. Management also raised its full-year adjusted per share earnings outlook Monday to reflect how it accounts for acquisition-related intangible assets and other acquisition-related costs, which it argues will help investors better compare its performance versus peers.

We’ve always liked this acquisition and disagreed with the market’s initial negative reaction to the news in December. We’re pleased to see the stock up about 8% since then. However, for Honeywell to really break out from here, we believe the company must do more portfolio reshaping to speed up growth and improve margins. Until we learn what management’s next move is, we are moving our rating to a 2.

We’ll take a chunk of these sale proceeds to buy more DuPont, which has more upside to our sum-of-the-parts-driven $100 price target. After DuPont announced a plan to separate into three companies last month, we’ve heard some on Wall Street argue the stock could be stuck in a “spin purgatory” until it gets closer to the breakup. As we said last Friday on the Homestretch, we understand how a breakup 18 to 24 months away could scare off some investors. However, we would never put it past a dealmaker like now-Executive Chairman Ed Breen to find ways to accelerate the value unlock if the stock continues to trade at a significant discount.

(Jim Cramer’s Charitable Trust is long HON and DD . 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.

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