6 New Sells From Jim Cramer's Charitable Trust

Includes: AAPL, ABT, GM, INTC, JPM, MO, PG
by: Investment Underground

By Kathleen Martin

Jim Cramer recently sold six positions from his Charitable Trust account. Below is a brief summary of those sells. This is a complicated market to achieve high yield from the appreciation of stock prices. Mr. Cramer’s trades are indicative of manager who is adopting a defensive position in the capital markets and is protecting the downside of his portfolio and trading stocks on down and upswings for the benefit of the dividend yields.

Altira Group (NYSE:MO)

This stock trades at around $28.00 its year high was $29.05 and year low, $23.20. MO manufactures and sells cigarettes, smokeless products and wine internationally. While cigarettes and liquor are not either politically correct or popular, they are goods that are consumed en masse in many parts of the world, making the company inflation-proof. Jim Cramer has obviously seen the reason in participating in this company while its shares were appreciating in value.

The company has cash of $3.04 billion and debt of $13.69 billion. Industry estimates show earnings decreases as a result of charges in the core business and the continuing decrease in the cigarette business. While gains made in smokeless products and other non-cigarette based revenue offset the losses, Altria will have to continue to use available cash to build out the non-cigarette revenue sources and possible acquisitions to grow the business.

While the dividend yield of 5.04% is attractive, the stock has hit a wall in terms of upside in the next year.

General Motors (NYSE:GM)

The company currently shows earnings of $4.57 per share, total cash of $31.98 billion and total debt of $11.69 billion. Its book value per share is $21.96. While the company has come a long way since its reorganization two years ago, there are aspects on the horizon which make the stock unattractive in the medium term.

GM missed third quarter earnings targets and has alluded to warnings about earnings shortfalls. In addition, the European financial crisis will have a negative impact on growth for the duration of the rebuilding in Europe. While demand for autos has increased due to more available financing, it is impossible not to recognize that the increase in sub-prime financing by captive lenders is repeating the same mistakes that put GM into bankruptcy two years ago.

The stock trades at around $21 off its year high of $39.48 and low of $19.05. Problems with the battery fires on the Volt model, economic turmoil and increasing uncertainty in the fuel prices make this stock a sell right now.

JP Morgan Chase & Company (NYSE:JPM)

The stock is trading around $33. It has a year low $27.85 the year high is $48.63. It has quarterly revenue growth of 3.60% and earnings per share of $4.69. The quarterly year over year earnings is 3.50%. Profits fell 4% in the third quarter on the weak performance of its investment and consumer businesses.

The banking industry is reporting that the overall malaise based on the European financial crisis and fears of a recession in the U. S., will negatively impact share prices of the largest and oldest banking institution in the United States. Unless and until solid economic growth can be depended upon, the banking industry in the U.S., particularly JPM will suffer from questionable asset portfolio valuations, credit restrictions and lack of detailed disclosure. Despite the dividend potential, these factors will continue to keep investors on the sidelines.

Abbott Laboratories (NYSE:ABT)

The stock trades around $54.57. The stock’s year high is $55.61. The low is $45.07. The Company’s stock is scheduled to split into two companies, one in medical products, one in research pharmaceuticals. Trailing twelve month P/E ratio is 18.27, and forward P/E ratio is 10.56. Three year annualized revenue and EPS growth stand at 10.7% and 8.6%, respectively. Operating margin is 16.3%, and net profit margin is 13.8%.

ABT pays an attractive dividend and is trading at the high end of its range. When the stock splits into two companies, it is unlikely that the research company will pay dividends in the near term. Mr. Cramer probably made the decision to exit the investment based on the stock’s price and the precarious position of the dividend. The earnings of the medical product company do not support the continued dividend yield which will make the stock unattractive to value investors.

Proctor and Gamble (NYSE:PG)

PG manufactures and sells consumer goods worldwide. The Company’s stock trades around $65, has a year high of $67.72 and a year low of $57.56. The Company has total cash of $3.58 billion and debt of $33.85 billion. Its debt situation is worrying, given the state of world economies. It has recently sold its Pringles Chips to Diamond Foods and its PUR Water division to Helen of Troy.

In November of 2011 PG issued earnings guidelines which stated it reaffirms earnings per share of $3.94 in 2011 and expects earnings of $4.52 to $4.83 in 2012. The Company continues to restructure its debt and is selling certain non performing divisions to stabilize the revenue streams. Sales growth of 3% to 6% in 2012 is predicted. The stock trades near its year high and is a sell at this time based on the sale of assets and restructuring costs.

Intel Corporation (NASDAQ:INTC)

The stock trades around $25 has a year high of $25.78 and a year low of $19.26.

The U.S. debt situation is the biggest reason that tech stocks have suffered a great deal in 2011. Budgets for IT in many corporations have been cut as the news of the U.S. economy remains uncertain at best. Intel is not immune from these budget cuts and economic uncertainty, but it is not a bad stock to own. It is steady, pays a dividend, occupies its space with authority and continues to exercise fiscal responsibility with its acquisition targets, its joint venture partners and its core chip business. Earnings of $2.31 remain in line with analysts expectations.

Having said that, it is not likely there will be much more upside movement in the stock.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.