We're jumping into this tariffs-driven market plunge and buying two stocks

Published Thu, Apr 3 202512:29 PM EDTUpdated Thu, Apr 3 202512:48 PM EDT

We are making two trades during Thursday's tariff broad market sell-off. We are buying 25 shares of Eaton at roughly $264. Following the trade, Jim Cramer's Charitable Trust will own 375 shares of ETN, increasing its weighting to 3.15% from 2.95%. We are buying 50 shares of Texas Roadhouse at roughly $169. Following the trade, the Trust will own 500 shares of TXRH, increasing its weighting to 2.65% from 2.4%. If a company does most of its business in the United States, has pricing power, has limited economic sensitivity — or pays a safe dividend with an attractive yield — it should fare better in this market sell-off. Companies that should hold up relatively better in this uncertain environment are ones with pricing power. If you have pricing power, you will be better equipped to pass on the tariff-related costs to customers and won't be stuck eating the charges. That's why we see opportunities to nibble on stocks that have been hit hard but have the makeup to weather this storm. According to analysts at Mizuho, Eaton screens high on its Pricing Power power ranking out of the electrical equipment and multi-industry group (industrials). Mizuho based these rankings on five considerations: market structure, regulatory-driven, market price elasticity, customer bargaining power, and solution orientation. One reason why Eaton and other electrical companies have pricing power is because its equipment — which power facilities like data centers, industrial complexes, commercial buildings, and utilities — is in short supply. "Electrical markets (ETN, HUBB, VRT) have exhibited stronger pricing power in recent years with large apparatus like switchgears and transformers still in short supply and areas like transmission & distribution utility components critically important and only representative of a single-digit % of the bill of materials." Get Your Ticket for the Annual Meeting! Secure your ticket today for the CNBC Investing Club's upcoming 3rd Annual Meeting on May 2nd in Orlando, Florida! The company is also sitting on a huge backlog. At the end of the fourth quarter, its electrical Americas backlog was up 29% year over year. A high backlog means the company has a ton of customers waiting for its products. It adds visibility in these uncertain times. As for Texas Roadhouse, it generates nearly all its revenue inside the U.S. and sources most of its beef — its most important commodity — at home. So the direct impact of tariffs should be very manageable. We just saw an analyst write last Friday that the restaurant chain saw March acceleration in same store sales based on their checks. Of course, this acceleration could prove to be temporary if the economy experiences a tariff-driven slowdown. However, Texas Roadhouse caters to more of a value-seeking consumer who wants a good deal – quality food at an affordable price. There's also a buyback here that could help support the stock in rocky times. In February, the company announced a new $500 million share repurchase authorization. (Jim Cramer's Charitable Trust is long ETN and TXRH. 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.

Traders work on the floor of the New York Stock Exchange during morning trading on April 03, 2025 in New York City.

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