During the January Monthly Meeting on Thursday, I looked at catalysts in the year ahead for all 33 stocks in my Charitable Trust, the portfolio we use for the Club. These are specific long-term catalysts — say, six months to a year — that I expect to happen. If there are obstacles that prevent the catalysts from being realized, it may be time to say goodbye. Let’s get into it, going alphabetically by stock ticker symbol. Apple Apple will most likely report a weak quarter next week and then give a bad outlook. Why own it? I don’t want to take a beating, but the biggest money is made with Apple by not giving up on it. We sold some higher in late December and are looking to buy Apple after the forecast because I think that later in the year, it will become clear that they have basically stolen artificial intelligence from another company that would normally have demanded gazillions of dollars for it but instead may, for all we know actually be paying Apple to take it so it didn’t take another company’s AI. I like that. I think Apple will figure out the quarter’s weaknesses, learn from it and course correct in China. Anyone who sells it now better be sure that she gets back in after the ball drops because I think Apple’s such a fine company and the next move after the shakeout will be up. Abbott Labs Abbott Labs is perhaps the most diversified health care company in the world with a mixture of devices and medicines and nutritionals that make for a fabulous mosaic. It’s incredibly well-run. The catalyst here is the settling of the lawsuits involving a special kind of infant formula that they have made at the behest of the FDA, the CDC and the NIH but are being sued by parents for creating a faulty product. I think that these agencies, which have now formally weighed in on behalf of Abbott will hold such sway that I don’t expect any big wins by the plaintiffs even as they are very sympathetic because the special formula use led to tragedies not of Abbott’s doing. I think it is worth $10 per share and then a gradual multiple expansion. The quarter it reported yesterday was excellent with some of the best growth you can get from healthcare. I like it very much. Amazon There are so many things that are happening at Amazon that are positive, but I think the real story in 2025 will be about Alexa. I know that she’s become an embarrassment for the company but the new Alexa that is coming out soon could be the ultimate assistant. She is supposed to be so much smarter and precise and knowledgeable and understanding that I think the device will become the key to a whole new Amazon ecosystem. I would like to see it by the end of the year. In the meantime, they seem to be doing everything you could ask for with search and ads and entertainment and Amazon Web Services. A smart Alexa? So needed. Broadcom The catalyst for Broadcom is VMWare breaking out in a way that drives gross margins dramatically higher. The rap against Broadcom is that it buys companies and dismantles them. I think that’s just unfair. We are talking about VMWare being the key to Broadcom’s cloud computing strategy. It just went from a headwind to a tailwind for the company. VMware is about 24% of the company’s revenues and it can have very high margins. If it delivers them this year, and I think it could, we could be looking at a whole new company and a much higher stock. Best Buy Best Buy’s catalyst was the AI-enabled personal computer, and it has come and went and therefore I have no real reason to own it other than a play on a rejuvenated housing cycle, a la the amazing recent performer that is Whirlpool . But we sold some Best Buy much higher and I am content to let the rest drift up and then punch it out when it does go higher because the catalyst I wanted so badly looks like a bust. The dividend yield of 4.4% protects me while I think about what my next move should be. But when a catalyst fails, you can’t invent a new one. That’s a lack of discipline, which will cost you in the end. BlackRock The catalyst for Blackrock is simple: I believe that if we have a bull market — and you know I think we are in one — Blackrock is the best pure-play stock on it. This company is the ultimate repository of generational wealth, and it can do what a bank does and so much more. Blackrock gives both institutions and individuals a great return. CEO and co-founder Larry Fink knows that Blackrock can beat out a bank on any complicated kind of lending work now—it’s a positive confluence–because it plays by much easier rules than banks have to. Still, if there is no bull market then I will be wrong and I should just give up and put the proceeds into something like Capital One, which I am liking very much and want to put into the Trust. Bristol Myers Squibb Bristol Myers is all about Cobenfy, their radical new treatment for schizophrenia that may also be used for bipolar depression. These are big, unpenetrated markets that haven’t seen any new approvals of any sort of potency or tolerance in decades. I know competitor Johnson & Johnson is all excited about its recent purchase of Intra-Cellular for $14 billion to build up its own anti-depression franchise, but I do not think it’s anti-schizophrenia drug, Caplyta, is as effective as Bristol’s Cobenfy. Plus, Cobenfy has far fewer side effects. I think we will see scripts build through the year as it becomes better known, and I don’t think the same will be said about J & J’s drug. Again, if the catalyst of consistent prescription build does not occur then we will have to move on rather than invent another reason to own this company. Club members know: Discipline always trumps conviction. Costco If you are looking through a catalyst prism as a measure of whether something is worth buying then Costco will not survive close scrutiny. We bought this great retailer not for specific catalysts but for a belief that the supply chain is so amazing that there can be double the number of Costco stores in the world than there are now, which means there’s plenty more membership fees coming, and the fees are what the immense profitability here stems from. Costco offers tremendous value to customers, and I have learned enough about how well-run Costco is from Richard Galanti, the now retired CFO, that I can’t touch this stock. I do not care about the Teamsters situation because it will be resolved effectively. In an era of horrendous inflation, Costco is doing more than any other company to keep costs down for its members. That’s what matters. The late Berkshire Hathaway hero Charlie Munger, who was on the board of Costco, always joked that the stock was never cheap but it was worth owning anyway. Sometimes you just have to own some stocks of places you go to month in and month out, as long as they are still doing great things. Costco continues to amaze both with price and with entertainment and all my Costco’s are a blast to shop at. Salesforce There are 12 Salesforce commercials with Matthew McConaughey and Woody Harrelson — not all have been released yet — and I think that each one is funnier than the last. More importantly, I think the ads are working. Companies see them and call Salesforce for demos. Viewers see them and, over time, I think will ask companies to provide them with an AI agent instead of traditional prompt menus when you call trying to speak to the pharmacy. Right now there is only one software company that has truly been able to make a lot of money with AI products, and that’s ServiceNow . My bad for not buying that one. It would have been deserving. The catalyst with Salesforce? I believe that Agentforce can be the biggest product in Salesforce’s long history, and I think it can become that in one year’s time. Tall order, and perhaps a stretch, but that’s what a catalyst is all about. CrowdStrike My catalyst for CrowdStrike is pretty simple: I want it to return to the same growth path it had before July 19 when the infamous glitch occurred. That will be a huge barrier to be crossed for this great company, and I think it will cause its stock to break out of its long holding pattern. The stock was at almost $400 shortly before the error heard round the world. It is now around $375 a share. I think it can take out that old high. I was with CEO George Kurtz in Tuscany, Italy, not that long ago. I was vacationing. He was visiting 130 clients in 100 days and stopped in to say hello. His crisis tour is now complete, and now he’s playing offense. You want to see what this company can do when it’s no longer in repair mode. I think it will be remarkable. I think the re-orders as they come up will be spectacular despite last summer’s programming gaffe. It takes a special company and a special CEO to come back from that morass. Coterra Energy Coterra’s catalyst is here: We have a president that is all in on fossil fuels, and the company has the lowest cost natural gas cost there is, which is why it has soared. We had to cut back our position because it went up so much. I think we have the single best oil and gas company there is. No need to sell anymore especially since our best energy analyst, Rusty Braziel, predicts a long-awaited breakout in natural gas prices. That would be spectacular for Coterra. DuPont DuPont’s spinning off its electronics business, a perfect catalyst, and that will be done by November. In the meantime, I am convinced that its water business, which it kept rather than be spun out, could still be sold. Why go and create a separate new company if someone wants to buy it? Why not just sell it? That’s my view, but the catalyst comes with the November spin. Until then, I urge patience even as it is irritating because DuPont just reiterated its quarterly guidance, which is a lot more than I can say for most chemical companies. Danaher and GE Healthcare Let me give you a twofer, Danaher and GE Healthcare , as they both have the same catalyst: We need to see the stocks of these two medical device companies be impervious to a lack of new Chinese orders. These are two cases where I am not happy with my performance because I believed that Chinese weakness was already baked in to the stock price, and it wasn’t. Danaher is a better run company and, unlike GE Healthcare, it is also levered to a return of biotechnology initial public offerings. But when my catalyst for 2024, the annualizing of a lack of Chinese business, came and went without a concomitant increase in share price, I should have just booted both. For Danaher, it’s tough to be so disappointed in what was once such a great company. I think it has grown complacent. GE Healthcare simply never developed any consistency and couldn’t replace the lost Chinese business. No catalysts, I am now indifferent to both and have to consider selling them when I can. Disney I had in mind a very specific catalyst for Disney , which is the opening of the new Universal Epic Universe in May from our parent company Comcast . Historically, any new destination in Orlando brings new tourists and any tourist in the area goes to Disney World. Sounds counterintuitive, but Disney has data showing that it could be very good for visitors at its park even as that’s not what spurred the visit. But that catalyst got obliterated by the sad, inconceivable Los Angeles fires. Now I fear Disney will miss the quarter due to a hit in California, and the numbers will have to be cut. Only then will the May Universal catalyst be in sight. I hope the company can quantify the weakness from the fires that it expects going forward by Feb. 5 when it reports quarterly results. At that point I think we should buy back the rest of the Disney we sold into some earlier euphoria. I think the stock is substantially undervalued. Substantially. But I think we will get a chance to buy it more cheaply because of how much the Street hates any downside surprise. Dover Dover’s catalyst is the completion of its multi-year turnaround out of low-multiple areas and into high-multiple businesses especially ones connected to the data center. CEO Richard Tobin is a dealmaker, and he has said he can sell slower growing divisions for premium prices to private equity. Let’s let him complete his mission and see how high it takes us. I also would like to see if Dover’s cryogenic division can be used to help keep the heat down in the data center. It’s something Tobin told me could be in the cards when he visited on set not that long ago. Eaton We just need Eaton to continue doing what it is doing. I know I was concerned that it was more of a Biden administration stock because it has invested a ton of money into the energy transition and that may not be as important with the new president. But its biggest markets are electrification, reindustrialization and the data center, so the catalyst here is that the president will be true to his word and emphasize all three. After what I saw with data centers and the Stargate Project on the second day of the Trump administration, I am tempted to sit back and wait for all three of these cylinders to fire. Consider it a hedged bet on the president’s plans to redevelop industry in our country because I do not think that he can stop the energy transition, just slow it down. Alphabet I do not have a specific catalyst for Alphabet . I like self-driving unit Waymo and think it is worth a lot, but don’t know how to monetize it. YouTube is the greatest medium for ads ever invented. The traditional search business remains strong, but I struggle to figure out how it lives when the generative AI chatbots just get better and better. Right now I think it is levitating and only because we are in a huge bull market can I justify owning it. That’s not enough. Too much fear of missing out and not enough catalyst, I’d say. This might be the year we bite the bullet in the long-standing romance that is Google. Goldman Sachs We made a lot of money with Morgan Stanley and moved it over to Goldman Sachs , which is the best way to play what I think will be a resurgent IPO market and a very strong mergers-and-acquisitions market now that the Federal Trade Commission and Justice Department are going to let capitalism do what it does best: create great wealth for those who are wealthy enough to afford it. I am glad that the regime of tyranny against tech has passed us and that every deal will no longer bring lawsuits. Goldman Sachs sells at a ridiculously low 14 times earnings, which is just insane. I think given it has consistently better earnings, and its outlook of strength, my catalyst here would be for this stock to get closer to a market multiple. Call it 20 times forward earnings. That’s where I will be satisfied. A catalyst of P/E improvement is always a good way to look at a stock, and Goldman is probably the cheapest stock on a multiple basis that we own. Home Depot We bought Home Depot because of the rate cycle. I have said over and over again I do not care about the cadence of cuts, I just care about the direction and it is going our way. What I hadn’t thought about was the catastrophic development in California, which will require what I think will be the most expensive rebuild of all time. Home Depot, with its addition of SRS Distribution for the professional builder, will most likely be able to best even the highest estimates for its 2025 forecast because of this disaster. The stock was down eight bucks Wednesday at one time, and I think when I see something like that happen again, we will recommend buying some as I don’t know how many breaks like that we will get. Honeywell We are scaling out of Honeywell because we got what we wanted: It will separate into two companies, one focused on aerospace and the other on automation, though it’s not been formally announced yet. We would not be starting our selling if I had more faith in the company earning more money in the interim. We have had several earnings disappointments, which I can’t tolerate, so I don’t want to ignore the catalyst we have gotten and then just start holding out for something better that might not occur. In the end, the parts are worth more than the whole, but we do have to account for performance. I am concerned about the pattern of multiple missed quarters. Linde Linde has done incredibly well without any revenue growth. My catalyst here is that this will be the year, thanks to rate cuts, that we begin to see sales improve. This is a remarkable gem of a company because most industrials would never have been able to grow earnings consistently with little revenue growth. I want to see what happens when topline growth returns. It could be gigantic for this company. Eli Lilly Eli Lilly has multiple catalysts. I expect to see positive GLP-1 trial readouts for hypertension, heavy drinking, several liver ailments, pre-diabetes, joints, dementia and specific cancers. I think it is reasonable to believe that 12% of the population in this country will be on these drugs and that India and China, which aren’t even in the numbers, could be gigantic markets. I understand how beaten up people feel, but we have to let the catalysts play out. The botched launch — caused by a misjudgment of the strength, not weakness, of the market — is now behind us. It wouldn’t surprise me if the whole problem came down to the pharmacy benefit managers who I think represent a toll, a friction on the system. This should be a very big year for the company. Meta Platforms We keep thinking about what will happen to TikTok. You think Meta CEO Mark Zuckerberg is thinking about anything but destroying TikTok? I have waited for Reels to take TikTok on in an unfair fight, and Zuckerberg now has one. I am just waiting to see how much business he picks up. It would also not astonish me if Trump partners with Meta and makes a deal with the Chinese government for ByteDance. I also believe that Zuckerberg’s work with glasses — reportedly now Oakley in addition to Ray-Ban — is going to start to move the needle. I think that happens this year. Microsoft Microsoft will be all about proving Salesforce’s Marc Benioff wrong about Copilot being Clippy 2.0, the disastrous 1996 personal assistant that some of us tried to use about 20 years ago. The fact is that I am concerned about Copilot, and I would like to see some good news on this front. I feel like I do about Alphabet on this one. I don’t have a specific catalyst and that is not good. This may be the year that we have to part ways with some of the “Magnificent Seven” for performance reasons. That said, I do believe CEO Satya Nadella has the resources to make Copilot come to life. But I do not expect a good quarter and wish the position were even smaller. Hard to walk away from a dominant company, though. Maybe they are getting a break with the Stargate Project and can free ride off of OpenAI and Oracle. Not clear. Unlike most of the analysts, I am a little more dubious how they come out to be a winner. Nvidia Nvidia’s catalyst will occur when we see all 45 plants that Blackwell is being made in running at full tilt with 99% yield, something we are not near yet. I think people do not understand that a Blackwell AI system must first be assembled in a foundry then disassembled into parts and then reassembled at the customer’s data center. It is that huge and that difficult of a procedure. Until all the procedures are finalized and everything is humming, I believe it will be an up-and-down stock, but we know from Stargate that the demand is there for much more product than it can produce. I also get the sense that the torture that an undeserved Nvidia suffered at the hands of the Biden White House with export restriction after non-negotiated export restriction. What a repulsive goodbye. Nextracker Nextracker is a quandary. The catalyst was a Kamala Harris win in the November election, kind of like a hedge. We didn’t get it and we thought we would be sunk. But somehow this stock hangs in even as the president dismantles pretty much everything that has anything to do with renewables. Still, we are going to have to come up with a new catalyst, or we are going to have to go because even as Trump is directly anti-wind and has said good things about solar, this company with American-made products needs its customers to have giant subsidies to do build major solar porjects. Those days are over. We need the space for better companies. Palo Alto Networks Palo Alto Networks had three recent downgrades put on the stock. That’s absurd, and I believe CEO Nikesh Arora is ready to get a ton of new business because his much laughed at “platformization” strategy has enabled him to have the best on-and-off premise solutions. He’s hungry to prove those three analysts wrong, and I think he will. He will wipe the floor with them, and remember cybersecurity remains one of the great secular growth stories of our time. Thanks, China! Starbucks Starbucks is a catalyst rich environment. We are going to see what happens when new CEO Brian Niccol actually puts his plan into place. I believe he himself will make goals, stretch goals and those will be the catalysts. I remember when he took over Chipotle , and we were all so worried about the franchise. He put that to rest in about a year. Let’s see what this year brings. The coffee chain is a taller order than Chipotle was, but Niccol is better now than he was back then. Constellation Brands Constellation Brands is bereft of catalysts. The one thing that kept me in was the cash flow generated. This was the year that the big expensive Mexican brewery was going to be completed and the cash would begin to build and returned to shareholders. But it has become a fiasco. The catalyst wasn’t worth it. There are just too many things going wrong in liquor and Mexico: cannabis, young drinkers going away, cost, health, Mexican tariffs, Hispanic immigration issues. I am all for being a contrarian, but the big cash flow and an insider buy by a smart board member — Bill Giles, the man who Elliott Management suggested join the board, just bought $186,000 worth — is not enough. It would be a big hit to our P & L, and I know we have sometimes left disasters like this too soon. But I am out of reasons to put up with this one any longer. A case study of disappointment all the way around. It’s mostly on me; I knew how bad things could be in this liquor business, but Constellation was simply the best house in a bad neighborhood that, overnight, became the worst house in a hideous neighborhood. Stanley Black & Decker We didn’t sell Stanley Black & Decker above $100 a share because we got greedy, though we did sell some in the $90s. We remembered how it had been much much higher at one time and figured it could do it again. We were wrong. Our catalyst had been the rate cycle. But ever since the CEO came on “Mad Money” and talked about how it is a 2027 story, I think we have lost the catalyst. While it is possible that the Los Angeles rebuild might impact numbers positively, this is another stock that has tried my patience long enough. 2027? Like with a Constellation or a GE Healthcare or Best Buy or Nextracker, I covet the space in our portfolio. I do not like to add a position until I can subtract one. It’s the best discipline of all. I am going to show it in 2025. TJX Companies The catalyst for TJX Companies continues to be the colossal amount of inventory out there. By some count, there’s the most that’s ever been, and as long as there is inventory, TJX will beat the numbers. When you close the Bloomingdales at Union Square in San Francisco, where do you think Macy’s puts that inventory? I bet it ends up at TJX. So, I am plenty satisfied with this one. Wells Fargo Finally, it’s been seven years since the Federal Reserve capped Wells Fargo’s ability to grow total assets. CEO Charlie Scharf has done yeoman’s work putting all the consent decrees to bed, but this unprecedented penalty still remains. This bank has been a terrific one and yet, like Goldman Sachs, it trades at at a low multiple. In Wells’ case, it’s 13 times earnings. This company used to have a premium multiple to the S & P 500. I think it deserves a 20 multiple itself. That’s the catalyst. I am waiting for it. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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.
