Having traded essentially flat since the end of 2020, Walmart Inc's (NYSE:WMT) stock hasn't done any favors for shareholders recently.
For the second time in a little over a month, Jim Cramer announced that he's trimming his Walmart position — and this time he nearly cut his stake in half.
"This sale will decrease WMT weight in the portfolio from about 2.4% to 1.35%," Cramer said Thursday in a letter to members of CNBC's "Investing Club."
Amid the bounce in the overall markets, Cramer said he felt it's appropriate to raise some cash in case the market retests the lows from Monday.
He did note that the market is "heavily oversold" right now and therefore he doesn't want to raise too much cash.
"At the same time, we must recognize that volatility is here to stay due to the Federal Reserve's projected plan of multiple interest rate hikes this year," Cramer said.
Walmart may act defensive if the economy slows down, but the stock has been unable to sustain any kind of a rally, he said, attributing the lack of momentum to inflationary costs.
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Cramer noted that heavy spending in order to ramp up Walmart's e-commerce business has limited the company's near-term earnings potential.
He also thinks Walmart's 1.6% dividend yield has become unattractive "now that it's roughly in parity with the rising 10-year Treasury yield."
The 10-year Treasury yield was hovering around 1.785% at the time of publication.
"We will book a small but still disappointing loss of about 6% from this trade," Cramer said.
WMT Price Action: Walmart has traded as low as $126.28 and as high as $152.57 over a 52-week period.
The stock was up 0.29% at $136.15 Thursday afternoon.
Photo: courtesy of Walmart.
