News & Finance
by Jim GilliamMay 30, 20150 comments
NEW YORK (TheStreet) Some big changes were made to the Action Alerts PLUSportfolio this week.
Jim Cramer and Jack Mohr said last week they started a position in Starwood Hotels (HOT) and now they added to their position in the leisure business. In the Weekly Roundup, Jim Cramer and Jack Mohr wrote, Our thesis is rooted in our belief that the company is benefiting from a favorable supply/demand dynamic in the U.S. and the organic global growth in travel, which supports its large international exposure long term.
Cramer said Adam Aron, the current CEO at Starwood Hotels, is making some big changes at Starwood, but whether he decides to split or sell the company, one thing is for certain: Hes just not going to sit there. That is why youve got to own it.
Similarly, AAP increased its position in 3M (MMM) because Cramer believes in CEO Inge Thulin. In the past AAP has been buying and selling 3M but Cramer says that those days are done, citing Thulins long-term vision and potential for tremendous growth as the reason for his conviction. Cramer says that he views 3M as a Warren Buffett stock in that it is a good stock, at a good company, at good prices.
AAP also took a small position in Express Scripts (ESRX). Cramer called Express Scripts a complicated story given the big questions as to whether it will be bought by Walgreens (WBA), another AAP holding, or if Express Scripts buys Rite Aid (RAD) of if Express Scripts will remain as the gatekeeper trying to keep pharmacy costs down.
However, Cramer sees value in Express Scripts because it is the cheapest company in the pharmacy benefit management business, a business Cramer considers to be one of the hottest areas in the markets right now, especially with an aging population driving growth.
Finally, having previously bought many shares of Kinder Morgan (KMI)when prices for it dropped, AAP sold Kinder Morgan for a position in Energy Transfer Partners ETP. Cramer says that although he does like Richard Kinder, the current CEO, there are other opportunities in the energy sector with better yields when theFederal Reserve does finally raise interest rates.
In addition to the position in ETP, AAP sold off the last of its holding in Kinder Morgan to buy shares of Occidental Petroleum (OXY). This move was not on any reduced conviction in our overarching thesis but because shares have appreciated to a point where we see meaningfully more upside in OXY on a relative basis, Cramer and Mohr wrote in their Actions Alert Plus update Thursday.