We're trimming a rallying defensive stock and buying other on a muted earnings move

We're making two trades ahead of Thursday's Monthly Meeting livestream , starting at noon ET. Selling 50 shares of Cardinal Health at roughly $251 each; reducing our CAH stake in Jim Cramer's Charitable Trust to 425 shares and decreasing its weighting in the portfolio to 2.75% from 3% Buying 75 shares of Bank of New York at roughly $138; increasing our BNY position in the Trust to 675 shares and increasing its weighting to 2.35% from 2.1%.

A major rotation is happening in the market on Thursday, with selling in AI and data center buildout winners and buying into defensive groups like healthcare and consumer staples that don't need a hot economy to hit their earnings targets. We're taking advantage of this move into healthcare to lock in profits in Cardinal Health, which is up more than 5% this week and on pace to close at a new record high. With shares at a high, we're downgrading the stock to our hold-equivalent 2 rating .

We picked at Cardinal Health over the past few months, buying 50 shares around $230 in August and another 50 shares in September in the low $230s after a big pullback. What got the stock moving back up again was news that it extended its distribution agreement with CVS Health . We called the update a clearing event , and this rally above $250 has come even faster than we expected. With the market now rushing to buy stocks with limited economic and data center exposure, we'll take the other side of that trade and lock in nice-sized profits on this position. From this sale, we will realize a gain of about 9% on stock purchased in March 2026. We still like Cardinal Health very much.

We're using the proceeds from the Cardinal Health trim to pick up more shares of Bank of New York. The financial services company reported a better-than-expected quarter Thursday: Revenue of $5.7 billion and earnings per share (EPS) of $2.37 versus estimates of $5.5 billion and $2.27, respectively, according to LSEG. The bank beat Street expectations on fee-based revenue and net interest income (NII). While costs were a little higher than expected, the beat on revenue more than made up for the expense miss.

BNY's earnings came one day after the trust bank State Street reported disappointing results, which took down the group. But BNY's numbers look much cleaner and its 29% Return on Tangible Common Equity (RTOCE) is proof. We thought BNY's earnings looked good enough for a positive response Thursday, especially given how far the stock has pulled back in the past six weeks. With shares right around the flat line, we're taking this opportunity to scale deeper into the new position.

Members, check your texts and email inboxes after our noon ET Monthly Meeting for our full BNY earnings analysis.