In a note to subscribers last week, I said I'm adding the air-conditioning manufacturer Carrier Global $CARR to the portfolio.

The stock's already fallen from nearly $60, so I'm betting that the stock is more or less done falling. But if the shares fall below $34, we'll reconsider the position - or perhaps average down. At $34, the current share purchase would equal a loss of around 1% to the value of the portfolio - i.e. keep your losses small, let your winners run.

The stock has shown exceptional strength lately, staying even despite the general downward market volatility in the first half of May.

$CARR is a pioneer in air-conditioning from its earliest years. But the firm only had its IPO in early 2020 after being spun off from its longtime corporate parent United Technologies.

If anyone wanted to buy a stock that's likely to benefit from the tragedy and trend of global climate change - this is it.

A good example is in NYC, where the local power company warned consumers that their electric bills would likely rise by 12% on a monthly basis - hotter temperatures are causing more people to install window/portable a/c units.

Likewise, in places like India (where the company manufactures under its subsidiary Carrier Midea India)...the country is undergoing a record breaking heat wave in May. The electricity grid is strained to the max because people are buying a/c units to deal with literally life-threatening extreme heat temperatures.

$CARR is no rocket ship - more like slow and steady, with consistent rising demand. You can buy a new A/C unit, but eventually it's going to need new parts, a shot of freon, etc - so this is a high cash flow sort of business.

$CARR is on track to $2.29 a share this year, $2.58 a share next year, and $2.89 in 2024. Analysts have started to raise profit estimates recently (notice the upticks in the blue and orange lines in the chart below) after the company reported strong quarterly results recently.

As the chart below shows. analysts have begun raising profit estimates for $CARR for 2022 (the blue line) and notably for 2024 (the orange line).

The current valuation - a price/earnings ratio of 17 - is about as cheap as its been since the company held its IPO in 2020.

And we all know we can't do without our air-conditioners. The parts wear out. Every decade or two, we have to upgrade the whole system to more efficient models.

Not a bad business model to have.

Jeff