Shortly after the opening bell Tuesday, we will be buying 50 shares of Boeing at roughly $217.03. In addition, we will be buying 5 shares of Costco at roughly $915.50. Following the trade, Jim Cramer’s Charitable Trust will own 400 shares of BA, increasing its weighting to roughly 2.30% from about 2% and 80 shares of COST, increasing its weighting to about 2% from 1.84%. We’re following up on what we said in Monday’s Homestretch about buying more Boeing. We were surprised to see Boeing give back about half of its gains tied to the Federal Aviation Administration easing restrictions on the 737 Max, since this will allow the aircraft maker to increase deliveries and ramp up monthly production. If Boeing can deliver more planes each month, its free cash flow should materially improve. Free cash flow is the best measure of the company. We’re buyers of Boeing with the stock down about 9% from its September high, though there’s a new wrinkle to monitor. The Wall Street Journal reported that Boeing is in the early stages of planning a successor to the 737 MAX. Developing a new aircraft is costly and could weigh on cash flow, but given the 737 MAX’s troubled history and the market share Boeing has lost because of it, moving forward with a new design may not be a bad idea. We’re also adding to our position in Costco. This small buy goes against our low average cost basis of about $290, but we’re willing to bend that rule since the stock is in a rough patch and we still view it as a high-quality company. Costco shares are about flat year to date and down about 15% from their February all-time high. The wholesale retailer reported its quarterly earnings last week, and while the results weren’t perfect with renewal rates ticking down, we were still pleased to see membership growth and gross margin expansion. The stock isn’t cheap on a traditional price-to-earnings multiple basis, but it never is due to the company’s consistent execution. Costco’s consistent market share gains make it a durable growth story, which is why we are buying this weakness and viewing the pullback as a long-term opportunity. (Jim Cramer’s Charitable Trust is long BA and COST. 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.
