Jim Cramer’s Investing Club meeting Wednesday: Retail sales, Devon, Bausch Health
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Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Wednesday’s key moments. Fed has more work to do Wait for answers on Devon Watch Bausch 1. Fed has more work to do January’s stronger-than-expected retail sales report bolsters our view that the Federal Reserve isn’t finished hiking interest rates yet. U.S. retail sales rose 3% month-on-month in January, far outpacing the Dow Jones estimate of a 1.9% increase, the Commerce Department said Wednesday. The data suggests the U.S. economy is still too hot for the Fed, which has been raising interest rates in an effort to tamp down demand and ease inflation. That perspective was also supported by data released Tuesday from the Labor Department, which showed consumer prices climbed more than expected last month. The S & P 500 edged down in midday trading, by around 0.15%, as investors digested the news. 2. Wait for answers on Devon Shares of Devon Energ y (DVN) slid more than 11% Wednesday after the oil-and-gas producer delivered disappointing fourth-quarter results the evening prior — a frustration we share. Devon also guided for higher-than-expected capital expenditures in 2023, while production expectations came in below analysts’ forecasts. We’re looking for answers from Devon’s management on how the company plans to continue returning cash to shareholders in a lower oil-price environment, particularly as its fixed-plus-variable dividend payout came in lower than Wall Street anticipated. 3. Watch Bausch A welcome leadership change at eye-care firm Bausch + Lomb (BLCO) is causing shares of Club holding Bausch Health (BHC) to surge 13% Wednesday, to roughly $8.52 apiece. Bausch Health owns nearly 89% of Bausch + Lomb, so what’s good news at BLCO is good news for BHC, too. On Wednesday, Bausch + Lomb announced that health-care veteran Brent Saunders would become CEO and chairman, effective March 6. Saunders is a solid pick to lead Bausch + Lomb, which had been a division of Bausch Health up until May 2022. That’s when Bausch Health took the eye-care company public, using proceeds from that transaction to pay down its own debt. But the ill-timed IPO generated smaller-than-expected proceeds for Bausch Health, one of many unfortunate developments since we initiated a position in the Canadian pharmaceuticals company in December 2021. Bausch Health has plans to further monetize its BLCO stake in the future, so we’re rooting for shares of the eye-care company to rise. Bausch + Lomb stock climbed more than 9% Wednesday, to over $18 apiece. Nonetheless, we’re maintaining a wait-for-more-information 4 rating on Bausch Health, amid continued uncertainty around its ongoing Xifaxan patent dispute . (Jim Cramer’s Charitable Trust is long DVN and BHC. 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.
