We're buying the dip in one of our newest stocks
Source
We are buying 80 shares of Bank of New York at roughly $153. Following the trade, Jim Cramer's Charitable Trust will own 320 shares of BNY, increasing its weighting to about 1.25% from 0.95%. We started a small position in this trust bank two weeks ago. With shares down about 5.5% over the past two sessions, we'll take advantage of this weakness and add to our position, as Jim mentioned during the Morning Meeting. The financials were under pressure on Monday after Bank of America CEO Brian Moynihan spoke at the Barclays Global Financial Services Conference and lowered expectations for investment banking and markets revenue. Shares of Bank of America fell about 5% on Monday, dragging other financials with it, as investors baked in lower positive operating leverage this year. Positive operating leverage is when revenue growth exceeds expense growth. This weakness has extended into Tuesday as the market grapples with rising bond yields and oil prices. BNY CFO Dermot McDonogh also spoke at the conference on Monday, but he didn't tell the same negative story as Bank of America. McDonogh acknowledged the third-quarter revenue was a little "slower" versus the seasonally strong second quarter, but said everything was within the guidance management provided at the end of the second quarter. On the capital markets side of the business, McDonogh said "volumes are strong and have kicked back into September," which we see as a positive signal given BNY's fee-heavy revenue mix. As we pointed out when we first bought BNY, roughly 70% of its revenue comes from fees. On expenses, McDonogh reiterated the bank's 6%-7% full-year outlook from the second-quarter earnings call. Some of the higher expenses are tied to stronger revenues, which helps explain BNY's guidance for 400 basis points of positive operating leverage in 2026. That figure is based on total revenue growth of 10% to 11% year over year, with the mentioned expense growth of 6% to 7% year over year. McDonogh said the bank is still working through its 2027 budgeting plans, but the company remains committed to delivering positive operating leverage again next year. With nothing having changed in BNY's positive operating-leverage story, we view this BAC-related decline as an opportunity to pick up more shares. (Jim Cramer's Charitable Trust is long BNY. 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.