Analysis: PYPL AMZN EBAY HD LRCX CVS

Shortly after the opening bell, we will be exiting our position in PayPal (PYPL) , selling 200 shares at a bid/ask of roughly $95.20/$95.45. We will realize a gain of approximately 27% with this sale.

We are selling the tag-end of our position in PayPal. Although the stock is trading lower this morning - consistent with the broader market - this sale represents our third at about $95 or above (the other two you can see here and here).

We are still fans of the digital payment space and how PayPal is monetizing both its namesake platform and Venmo, however, we think the company's valuation has gotten full and we lack catalysts at the moment.

Let's go back to last May when the stock plummeted to the low $70s (see our trade Alert here) on worries of Amazon (AMZN) related competition and its upcoming split for eBay (EBAY) . It was our highly informative Teach-In event that helped dispel this bear thesis against the stock, and then a flurry of summer acquisitions (iZettle, Hyperwallet, and Simility) put the company back on offense. The market loved each of these deals, but since then, the pace of deal making at the company has cooled down significantly. Furthermore, like we discussed in the company's most recent earnings release (see our Alert here), there hasn't been much chatter around new partnerships that further integrates PayPal and its platforms into everyday society.

It is well understood at this point that PayPal is a fast-growing company in the digital payments industry, but the market likes hearing about new deals and exciting partnerships for it to re-rate higher. Without it, the valuation becomes full. That's why we have been taking our big gains in this position, and now finally exiting.

Lastly, this sale will improve our optionality and provide us with some flexibility to bulk up on the positions we want to add to --  Home Depot (HD) , Lam Research (LRCX) , and even CVS Health (CVS) -- as the market comes in. We will keep members updated with any further moves today.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long AMZN, HD, LRCX, CVS.