We're booking profits in 2 Dow stocks riding double-digit gains to start 2026
C
CNBC Finance
3 min read
We are selling 50 shares of Home Depot at roughly $390 and 20 shares of Honeywell at $236. Following the trades, Jim Cramer's Charitable Trust will own 330 shares of HD, decreasing its weighting to about 3.25% from about 3.75%, and 390 shares of HON, decreasing its weighting to about 2.35% from about 2.45%. We're raising some extra cash by trimming two Dow Jones Industrial Average stocks that have significantly outperformed the broader market this year. Home Depot and Honeywell stocks struggled in 2025, but our patience paid off with double-digit percentage gains to start 2026. Existing home sales are the primary driver of Home Depot's business, but this market has been stuck at multidecade lows because many homeowners don't want to give up their low single-digit mortgage rates. That's why the company's same-store-sales growth has been muted, limiting Home Depot's earnings growth. But the home improvement retailer has finally benefited from optimism that the Trump Administration will make home buying more affordable and revive the housing market through various programs, such as directing Fannie Mae and Freddie Mac to buy $200 billion in mortgage bonds to push down rates. Home Depot could rally more if the 30-year mortgage rate falls below 6% and stays there, but a setback in this momentum could cause HD shares to pull back, too. With shares up 14% since we last added to our position in November, when the stock was down 4% as investors overreacted to its earnings report , we're trimming our position and downgrading our rating to a 2. As for Honeywell, we're locking in gains for the second time this year. When the stock rose by more than 4% last Thursday in response to its strong quarterly results , Jim said he wouldn't sell any shares, expecting the planned aerospace separation in the third quarter of this year to unlock additional value. We continue to believe this, and the rise to new all-time highs in Honeywell and DuPont since their splits in late 2025 is a validation of our thesis that industrial breakups create value. However, we're locking in gains because price is what ultimately shapes our reasoning, and Honeywell shares have added an additional 4% since the quarter. With another sale on the books, we can let Honeywell run a little more until the next leg up in price. From the Home Depot trim, we will realize a gain of about 7% on stock purchased in September 2024. We'll realize an average gain of about 30% on Honeywell stock purchased in 2022 and 2023. (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.
