We are selling 100 shares of Abbott Laboratories at roughly $110.84. Following the trade, Jim Cramer’s Charitable Trust will own 700 shares of ABT, decreasing its weighting in the portfolio to 2.34% from 2.66%. We’re trimming our Abbott Laboratories exposure on concerns that Wall Street will temporarily turn on diabetes device makers in reaction to Club holding Eli Lilly ‘s impressive new study for GLP-1 obesity drug Zepbound. The key takeaway: Zepbound significantly reduced the risk of progression to type- 2 diabetes by 94% among overweight or obese adults with pre-diabetes. The news is sending shares of Dexcom and Insulet roughly 6% lower as investors worry that if fewer people develop diabetes, these companies will have a smaller market to serve. Abbott Labs is a diversified health-care company so it makes sense that its stock is only down less than 1%. However, its continuous glucose monitoring system, Freestyle Libre, is such a huge part to its growth story that we can’t help but think renewed concerns about GLP-1s disrupting the industry could put a lid on the stock. Abbott Labs has previously published studies that showed people with type-2 diabetes saw better health outcomes when they used FreeStyle Libre along with GLP-1s. That was encouraging, and eventually last year Abbott Labs was able to beat the narrative that GLP-1s are a major risk to its business serving diabetes patients. The concerns this time are a bit different, and Abbott Labs may be able to beat back the worries again. But it could take some time. Additionally, in similar thinking to our sale two weeks ago , shares of Abbott have curiously rallied more than 5% since an adverse verdict in late July in its first premature infant formula case in Missouri. We still think Abbott has lost more in market capitalization since this legal risk emerged in March than what a potential settlement could look like. However, the company still has a few more hurdles to get through before this overhang goes away, including another trial starting Sept. 30 in the same Missouri court. Our sale Tuesday will give us room to be ready to buy more Abbott if it gets hit again on this litigation risk. Plus, we don’t think it hurts to have a little extra cash with the market as overbought as it is after eight straight sessions of gains. We’ll realize a small loss of about 1% on stock purchased in January. (Jim Cramer’s Charitable Trust is long ABT and LLY. 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.
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