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We will purchase 250 shares after you have received this email. American Eagle Outfitters (AEO)At approximately $22.85. The Charitable Trust will now own 4,950 American Eagle shares after the transaction. The AEO portfolio will be boosted by this purchase, which will see it rise from 2.63% to 2.777%. 

In response to the poorer-than-expected November retail sales report retailers are seeing a major drop in stock prices on Wednesday. This downturn confirms the large sell-off that Monday’s group suffered, possibly due to fears that the fast spreading omicron virus will prevent shoppers from shopping at the malls during the holiday season. Retail investors are now taking a defensive stance, which is why there has been a large rotation of stocks from department stores and specialty retailers such as American Eagle Outfitters. This also explains why companies like Walmart (WMT).

Consider this though: AEO’s trading is back to its February levels due to the week’s fall. This trip is despite Aerie’s market share gains and new customers. Aerie also saw a margin increase due to Aerie’s strength in casual wear, denim and all the logistical improvements that were made through smart acquisitions. Although we clearly bought AEO too soon, the poor stock performance will not stop us from buying it again.

American Eagle Outfitters reports the group’s best-performing third quarter. Although this retailer is not in financial trouble, it’s not in a state of distress.  

We want AEO to continue at the current levels, as investors receive a solid dividend. The dividend yield is now at 3.17%, due to recent equity price declines. A dividend this large should be sufficient to support the stock’s low price-to earnings multiple. 

AEO is not the only thing we’re looking at. Boeing (BA)Boeing is a possible purchase, despite its well-documented problems. Boeing is now trading at $191, which represents a significant drop from its previous gains of nearly $90. This was due in large part to China’s issuance an airworthiness instruction for the 737 MAX. This was an important milestone in the return of the aircraft to service in China’s second largest domestic aviation market. Additionally, we love the energy that Boeing shows with its orders as well as its 737 MAX deliveries. 

Because we don’t want to exceed our low $179 average costs in an existing position, we decided against adding to the Boeing position. We did however want to make a point of what we see as an opportunity, particularly if stock prices rise further due to concerns over 787 deliveries being suspended and rising omicron incidences on international travel.

Also, Eli Lilly (LLY)And Nucor (NUE)Following the release of updated guidance by both companies, they are front and center in headlines on Wednesday. Their stocks are moving in opposite directions, with Eli Lilly, which we have been steadily buying for the portfolio, leading the S&P 500 this morning in response to its raised 2021 outlook and upbeat 2022 forecast.

Nucor (which is currently in its interim) we sold some shares of at around $120 in late NovemberAfter management’s fourth quarter record earnings, which was below street estimates,, is today’s big laggard. 

Today’s thoughts will be on Nucor, Eli Lilly and other topics. However, we would like Investing Club Members to know that the weakness of NUE is more of an opportunity than a threat to our ability to buy back more. We would actually buy Nucor from this decline, if it weren’t for our Charitable Trust position. However, from our point of view, this decline is not being bought. We wait to see if the average cost basis for Nucor will increase by $101.46.

CNBC Investing Club now serves as the official residence of my Charitable Trust. This is where I share my market intelligence and every move that we have made for our portfolio. Action Alerts Plus has ceased to be affiliated with my writings and the Charitable Trust.

Subscribers to CNBC Investing Club will get a trade alert prior to Jim making a trade. Jim usually waits approximately 45 minutes to send a trade alert before purchasing or selling stock within his charitable trust portfolio. Jim must wait 5 minutes before sending a trade alert to the market, if it is pre-market. Jim will execute the trade if the trade alert has been issued less than 45 minutes prior to the close of the trading day. Jim may not execute a trade if he has spoken about the stock on CNBC TV for less than 45 minutes. See here for the investing disclaimer.

 (Jim Cramer’s Charitable Trust has been long AEO. BA. LLY. NUE.