We're buying more shares in chips and beer, putting recently raised cash to work

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We're buying 100 shares of Marvell Technology (MRVL) at roughly $45.07 each; and 20 shares of Constellation Brands (STZ) at roughly $239.44 each. Following Thursday's trades, the portfolio will own 1,400 shares of MRVL, increasing its weighting to 2.23% from 2.07%; and 350 shares of STZ, increasing its weighting to 3.04% from 2.87%. We're nibbling on a couple of stocks Thursday morning, putting back to work most of the cash we raised Wednesday after we trimmed our Humana (HUM) position near its 52-week high. We are picking up shares of Marvell Technology, which due to the recent selloff in semis now trades at a very reasonable next 12-month price-to-earnings multiple of about 18x. Sure, one may look at that multiple and say earnings estimates are too high and need to come down — and they may to some extent. However, as we learned last week from Micron , the weakness in the semiconductor industry is coming from the consumer side — like PCs and smartphones — and not the data center, which represents nearly half of Marvell's revenues. In fact, Marvell has the least exposure to consumer end markets and the most to the secular growing data infrastructure markets like data center, 5G, and in auto of any semiconductor company we follow. But you would not know this by looking at Marvell's stock performance in the second quarter , making this a situation where we believe the good has been tossed out with the bad. Even though Micron provided a downbeat forecast for its next quarter, we are encouraged by the bounce-back action in its stock price, as it suggests that weakness in semiconductor stocks may be overdone. Lastly, we're paying close attention to good earnings guidance Samsung provided earlier Thursday as another sign that the recent chip selloff has gone too far. For Constellation Brands, the stock has been able to string together a bunch of positive days this week but is still a couple of dollars down from when the company reported last Thursday. We still see this as an opportunity to scoop up shares. We thought last week's post-earnings selloff , which was due to management not passing through its big earnings beat to the full-year outlook and the announced 26.5% premium to eliminate the Class B share line, was an overreaction. Guidance may have been unchanged, however, the continued momentum and share gains Constellation is seeing in its Modelo, Pacifico, and Corona beer portfolio suggest the company is performing much better than what the numbers suggest. Therefore, we believe management is simply being conservative. On the deal with the Sands family to eliminate the Class B line, we believe this will be a great deal for shareholders because the dual-class structure has been the primary reason why the stock traded at a discount to peers. Once this overhang is removed, we think STZ will trade at a higher multiple. (Jim Cramer's Charitable Trust is long MRVL, STZ and HUM. 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.

Workers load bottles of alcohol into boxes at Southern Glazer's Wine and Spirits LLC distribution center in Louisville, Kentucky, on Monday, June 28, 2021.

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