Buy 75 shares of Dover at about $180. After the trade. Jim Cramer’s charitable trust will hold 250 shares of Dover, increasing its weighting in the portfolio from about 1% to about 1.4%. Dover shares have had a tough week, falling along with many other industrial stocks on concerns about the health of the manufacturing sector after the release of weak PMI numbers on Monday. We see this weakness as the next opportunity to buy Dover as we gradually expand into this position we started on May 28. While some of the industrial activity is certainly affected by the Federal Reserve’s high-for-long interest rate policy, concerns about the group as a whole represent a buying opportunity for Dover because the company has several business lines that are growing at a much faster pace than the overall economy. This momentum should be sustained due to exposure to several mega themes. The company is involved in building data centers to support the rise of artificial intelligence computing. Dover makes thermal connectors used in liquid cooling for data centers, a process that is becoming more popular due to AI.The company also manufactures heat exchangers used in data centers, HVAC systems, and other industrial markets that require greater energy efficiency. Dover’s exposure to the healthcare industry is also promising. Specifically, the biopharmaceutical parts business is finally turning around as customers reduce excess inventory and biotech financing improves, and similar trends brighten the outlook for fellow club namesake Danaher. Dover’s products in this space include flow control valves and ultrasonic sensors. The CO2 systems business is also benefiting from regulatory tailwinds that are driving a shift to natural refrigerants in the food retail market. We appreciate how Dover executives have managed the company’s portfolio, selling non-core businesses with less attractive growth profiles and using the proceeds to fund bolt-on acquisitions in more attractive sectors to make it less susceptible to economic cycles. The Illinois-based industrial company is also a Dividend Aristocrat, having increased its quarterly dividend to investors for 68 consecutive years. (Jim Cramer’s Charitable Trust holds DOV. See here for a complete list of stocks.) Subscribers to Jim Cramer’s CNBC Investment Club receive trade alerts before Jim makes any trades. Jim waits 45 minutes after sending a trade alert before buying or selling shares in the Charitable Trust’s portfolio. If Jim talks about a stock on CNBC TV, he waits 72 hours after issuing a trade alert before executing the trade. The above Investment Club information is subject to our Terms of Use and Privacy Policy and Disclaimer. Receipt of any information provided in connection with the Investment Club does not create any fiduciary duty or liability. No specific results or benefits are guaranteed.
We’re buying more of this industrial stock with data center exposure
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