Why Jim Cramer Is Trimming His Union Pacific Position Ahead Of Earnings

Jim Cramer trimmed his Union Pacific Corp UNP stake Wednesday, bringing the total position to 2.60% of his charitable trust.

"The company's 7% year-over-year volume growth target is at risk due to challenges related to the chip shortage and congestion at the ports," Cramer said in a note to members of CNBC's "Investing Club."

The main reason he is trimming the position is that he thinks a pullback is likely following the company's earnings report.

Union Pacific is set to announce its third-quarter financial results before the market opens on Thursday. Cramer said Union Pacific has traded lower following four of its past five earnings reports.

See Also: A Look Into Union Pacific's Debt

He noted Union Pacific has become a pretty large position in the charitable trust after he added 50 shares around $209 in early September. He sold 150 shares for roughly $225 per share today.

Cramer emphasized that Wednesday's portfolio move is only a trim and that he might buy the shares back on a pullback. He plans to hold the majority of his stock longer-term because he expects it to perform well in 2022.

UNP Price Action: Union Pacific has traded as high as $231.26 and as low as $171.50 over a 52-week period.

The stock was up 0.16% at $226.13 at time of publication.

Photo: Arvell Dorsey Jr. from Flickr.