Shortly after the opening bell, we will sell 5 shares of Broadcom at roughly $1127.99. Following the trade, Jim Cramer’s Charitable Trust will own 75 shares of AVGO, decreasing its weighting in the portfolio to 2.8% from 2.98%. Last Friday, we said we planned to trim our Broadcom position given the stock’s recent surge. The semiconductor and software giant was one of the top performing stocks in the S & P 500 last week, gaining nearly 20% in what we chalk up to a delayed reaction to a stronger-than-expected VMware outlook . Another reason: It’s likely CEO Hock Tan will empty the tank on his $7.2 billion buyback authorization before the end of 2023. It’s not every week you see a company of Broadcom’s size make a move like this in a short period. The company’s market cap currently sits at roughly $530 billion, making it one of the most valuable companies in the S & P 500. It’s important to note that this small trim does not reflect a change in our long-term thesis. The Broadcom story still has legs, thanks to AI-related networking revenues, VMware, and the eventual return to growth in the company’s more cyclical semiconductor markets. In addition, the stock isn’t expensive, trading at roughly 24 times earnings with a 1.85% dividend yield and consistent buyback. However, our profit-taking discipline on a stock that went vertical last week trumps our conviction in this great performer. We’ll realize a great gain of 31% on stock purchased in August 2023. (Jim Cramer’s Charitable Trust is long AVGO. 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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