Jim Cramer's Action Alerts PLUS Weekly Roundup

We finally experienced some relief from the persistent earnings multiple contraction we've seen ever since earnings season. That said, the market quickly seems to have found itself in overbought territory. Because we were patient and picked away at our favorite stocks along the way down, the strategy now is to pare back our larger positions into strength.

I sold DuPont (DD) and Time Warner (TWX) this week; 19 stocks is the fewest I can remember having on the position sheet in some time. I've been burned a few times already this year when I was complacent with my gains, and will use this lesson to raise my cash position from 7.4% into further strength.

That can be a little frustrating, especially when I've just made back 5% to 6% over the past week and am so close to getting back to break-even. But a lot can happen between now and the slate of events scheduled for June -- why not have some cash on the sidelines for a rainy day?

(Remember, Ones are stocks I would buy right now, while Fours are stocks I want to unload.)

ONES

Charter Communications (CHTR:Nasdaq, $3.85, 65,000 shares, 7.18%): By selling out of Time Warner, I've selected my top two horses for my cable bet. It's frustrating to see this stock get battered by short-sellers every afternoon, but I think that valuations will be rising across the industry this year with companies like Charter rolling out a lot of new products through their set-top boxes.

Cumulus Media (CMLS:Nasdaq, $18.54, 6,000 shares, 3.19%): Traditional radio companies are facing added competition with the satellite operators starting to add local services. This was a big turning point for the dish television broadcasters, but I believe Cumulus has plenty of room to grow as a distant No. 2 operator in this industry.

Forest Laboratories (FRX:NYSE, $63.39, 4,700 shares, 8.55%): Added 200 shares on Monday, a full 4 points lower than where the stock closed the week. My homework shows that Forest continues to gain market share in the depression and Alzheimer's markets, and that it has a solid pipeline, yet the stock lost more than 15 straight points without even the hint of a profit warning. I think the stock now has a firm footing underneath it, on the back of an analyst upgrade this week, and believe Forest will trade back to the mid-$60s in the near term.

JDS Uniphase (JDSU:Nasdaq, $3.37, 47,500 shares, 4.59%): Added 8% this week, and I think the stock can continue to recover if anecdotes of increased fibre orders hold true through the end of the quarter.

Nortel (NT:NYSE, $3.83, 65,000 shares, 7.14%): Bought 5,000 shares on Wednesday, and would like to buy another 5,000 now that the Canadian government has granted Nortel a second waiver on $328 million of support. The addition of former Canadian finance minister John Manley to the board of directors also says a lot to me about how strong the company will be when it emerges from the blanket of problems created under the prior management team.

This man has definitely heard the worst-case scenario for Nortel, and didn't need to sign on if he felt the investigation and audit would unearth many more serious problems. The one thing holding Nortel from pushing back over $4? Too many bullish analysts out there. It may be a contrarian idea to some of you readers but my experience tells me that we need more calls like this week's Bernstein downgrade or a Bank of America target cut before the stock bottoms out for good.

TWOS

Alcoa (AA:NYSE, $31.30, 8,000 shares, 7.19%): Aluminum demand remains well ahead of industry capacity, and management is looking overseas to build new smelters, where the company can take advantage of significantly lower electricity prices. Alcoa has already recovered nearly 10% from its recent lows -- and like Phelps Dodge (PD) -- we must be ready to take some shares off the table at $33.

Apple Computer (AAPL:Nasdaq, $28.06, 2,500 shares, 2.01%): Continues to trade at an attractive valuation, especially when you back out the cash on the balance sheet. Would like to double my Apple position over time, but will wait to make my next purchase a dollar lower, so as not to violate my cost basis.

Comcast (CMCSA:Nasdaq, $28.95, 6,500 shares, 5.40%): I think the stock can rally back into the low-$30s, with more attention being devoted to the company's VoIP and other new initiatives. I believe 2004 is the year that cable really gets a leg up on the phone operators, and it will be the Robertses who'll lead the charge.

EMC (EMC:NYSE, $11.24, 12,500 shares, 4.03%): Continued to recover nicely. It continues to do well in the core storage business, and announced an attractive new low-priced product for smaller business. That said, it'll be hard for a stock that trades at 30 times earnings to garner much support in a choppy market, and I'd consider paring back my EMC stake at or above $12.

Halliburton (HAL:NYSE, $29.04, 4,500 shares, 3.75%): Relatively quiet week, and no news on the Iraq/asbestos fronts has generally been good news for the company. If the oil stocks sell off in the near term and Halliburton pulls back below $28, I'd consider rounding my stake up to 5,000 shares.

Ingersoll-Rand (IR:NYSE, $65.30, 3,000 shares, 5.62%): Has rallied back to my cost basis, and I'd even consider peeling off 500 shares up around $70. We were early to the game, picking away at Ingersoll below $60. With that in mind, let's wait to sell when the analysts come in after the fact, and try to bull the stock higher.

Kerr-McGee (KMG:NYSE, $49.25, 2,000 shares, 2.83%): Midquarter update was uneventful, but the company said it may be facing higher production costs. With OPEC serious about raising output and the administration insistent on sticking to the June 30 hand-off in Iraq, I think that oil could experience a near-term selloff similar to the discounting we saw in the metals earlier in the month. With that in mind, I'd wait to add 500 shares until Kerr-McGee sees $48. As a reminder, investors at the close of trading on June 1 will qualify for the company's next 45-cent quarterly dividend, to be paid July 1.

Kmart Holding (KMRT:Nasdaq, $52.36, 4,000 shares, 6.01%): Picked up 1,000 shares Friday, as I believe the retailer will continue to move higher over the near term. Kmart has a lot of valuable real estate on the balance sheet, and is still in the early stages of executing its profit recovery strategy. With that in mind, I'm leaving room to buy another 1,000 shares if the stock retreats to $49.

UnitedHealth Group (UNH:NYSE, $65.25, 1,200 shares, 2.25%): Been steadily moving higher since we bought the stock, no matter which direction the market is moving. That said, the Oxford purchase should add to future earnings, and I believe UnitedHealth remains attractive at 17 times earnings.

Univision (UVN:NYSE, $32.55, 5,000 shares, 4.67%): Media stocks have come under pressure of late, but the company is in an attractive market and should continue to grow at a faster clip than the industry majors. I'd look to add to my stake if Univision pulled back a dollar from here.

Zimmer Holdings (ZMH:NYSE, $85.35, 1,800 shares, 4.41%): Took in a total of 600 shares this week -- again, 4 to 5 points lower than where the stock went out Friday. Zimmer sold off on some news of insider selling that had already been priced in for a couple of weeks, giving me the advantage I'd been waiting for to build my position. I'll round my position up to 2,000 shares if Zimmer falls back around $80.

THREES

Intel (INTC:Nasdaq, $28.55, 3,000 shares, 2.46%): Hosts its closely followed midquarter update Thursday. Guidance will likely be narrowed, but should remain in line with previous statements, reflecting a strong business outlook. I believe Intel's stock can break out of its recent trading range, and would look to cut back my stake at $30.

InterActiveCorp (IACI:Nasdaq, $31.26, 5,000 shares, 4.49%): Pared back a total of 1,200 shares this week. Diller gave a good presentation at the Goldman Internet conference this week, but I wanted to right-size this position to my thesis that it's going to take a while for the market to realize that management's increased spending to defend online travel market share will pay off.

Phelps Dodge (PD:NYSE, $67.90, 3,500 shares, 6.82%): Sold 1,200 shares Friday, as the stock had rallied 15% from the bottom over the past two weeks. I continue to believe Phelps can trade higher, given the positive outlook for copper prices. That said, my experience tells me you can't let your largest position run that far without taking action. If you're greedy with paper gains in an oversold market, you'll often find they disappear faster than they materialized in the first place.

Regards,

James J. Cramer

DISCLOSURE: At the time of publication, Cramer was long Alcoa, Apple Computer, Charter Communications, Comcast, Cumulus Media, EMC, Forest Laboratories, Halliburton, Ingersoll-Rand, Intel, InterActiveCorp, JDS Uniphase, Kerr-McGee, Kmart Holding, Nortel, Phelps Dodge, UnitedHealth Group, Univision, Zimmer Holdings.