NEW YORK (TheStreet) -- Last week, Jim Cramer and Stephanie Link, co-managers of the Action Alerts PLUS portfolio, decided to exit their position in Morgan Stanley (MS) and adopt a more cautious outlook on the financial sector as a whole.
In a recent video interview, Link stated, "I just don't like the way the yield curve is acting in the near-term, even if it is temporary." Add in Morgan Stanley's high beta, and it all but made sense to sell the name in order to reduce sector exposure.
However, short-term weakness and consolidation can work in investors' favor if they believe in the longer-term picture. And that breather is exactly what they're looking for after the sector put up big returns in 2013.
According to Link and Cramer, they plan on using their gains in Morgan Stanley to add to specific companies on a pullback. These buy-on-weakness stocks include: Bank of America (BAC), J.P. Morgan (JPM), KeyCorp (KEY), U.S. Bancorp (USB) and Hartford Financial (HIG).
Get more of Jim Cramer and Stephanie Link's top picks in real-time. Click here to begin your free trial today!DISCLOSURE: At the time of publication, Cramer's Action Alerts PLUS portfolio had a long position in BAC, JPM, KEY, USB and HIG.
-- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV