Jim Cramer's Action Alerts PLUS Weekly Roundup

Pretty nice week for the market when you consider it had to battle some Greenspan economic testimony and another hurricane in Florida. I am finally seeing some real momentum in telecom equipment, and very few people are as bullish on that space as I am.

We heard from Lucent (LU) and Nokia (NOK:NYSE ADR) this week that the Bell companies are unleashing their spending. We know the worldwide telcos are spending like crazy now that their balance sheets are fixed and they get the benefit of accelerated depreciation this year. That means you have to own at least one of these behemoth plays: Lucent, Nortel (NT) or JDS Uniphase (JDSU) .

At the same time, I am detecting a peak in the cyclicals, as should be happening now. We are on the verge of the third tightening this year and that will hit that group hard this time around because the economy is actually weakening, not strengthening.

That means the most buyable groups remain financials -- they do better after a third tightening (provided the Fed takes a break) -- and the oils, which are going to have the best earnings comparisons in a long time. We are well positioned for both.

I added one new name this week, as I promised: Urban Outfitters (URBN) . I am convinced this retailer has five years of growth ahead of it with its flagship Urban, Anthropologie and Free People divisions. I urge you to go see one of these stores and you will see what I like in this fantastic-growth retailer.

I still have a nice cash position of a little less than $200,000 and I am waiting for further weakness in the telco complex, cable complex and radio complex to deploy that capital.

Remember, Ones are stocks I would buy right now; Twos are stocks I would buy on a pullback; Threes are stocks I would sell on strength; and Fours are stocks I want to unload as soon as my restrictions allow.

Ones

American Physicians Capital (ACAP:Nasdaq, $30.80, 1,500 shares, 1.31% of the total): Bought 500 shares on Wednesday. I am convinced that no matter who wins the presidential election in November, the country is in no mood for more medical malpractice malarkey and will make it so that the jury verdicts are going to go down for doctors, not plaintiffs. That's a huge win for ACAP; this stock is going much higher because of the new political climate.

Cabela's (CAB:NYSE, $24.70, 3,500 shares, 2.44%): The stock may be trading lower, but it's not in reaction to a change in the business landscape for Cabela's. I have bought it at this level because of my restrictions, but will look to add more once I am free to trade the stock if it stays down here. This is a high-quality growth retailer, and that's what works in this unfriendly environment.

Charter Communications (CHTR:Nasdaq, $3.17, 92,500 shares, 8.29%): I know, I know, the stock continues to do nothing, but I would tell you that when the Adelphia auction smoke clears, this stock will be higher, not lower, and I believe that the selling is way overdone. Carl Vogel was dealt a bad hand, but is making improvements in the business that ultimately will be reflected in the cash flow. Remember, this company has the highest unlevered cash flow in the cable business. Not too shabby when you consider the balance sheet.

JDS Uniphase (JDSU:Nasdaq, $3.41, 55,000 shares, 5.30%): Corning (GLW) says Verizon (VZ) is spending on fiber, which means JDSU will be seeing some nice strength in orders. I continue to believe this stock is overly hated and ignored simply because of its large share count, and I anticipate another upside surprise like the last one that took the stock over $3.50 a share. The company is taking share in the brutally competitive marketplace of fiber.

Kellogg (K:NYSE, $42.12, 1,000 shares, 1.19%): Unlike so many others in the packaged goods segment, notably Coke (KO) , Dean Foods (DF) , and Kraft KFT, Kellogg is doing great. Yet the stock trades at only 21 times earnings. In an era of slowing growth, this stock should work its way over $45 a share.

Kerr-McGee (KMG:NYSE, $54.03, 2,500 shares, 3.82%): What's not to like here? This company is having a huge quarter and the hedges are coming off. Last-quarter profits were hurt as the company had locked in a low price for the oil it sells. That, in addition to high oil prices and a 3.3% yield, makes this name hard to pass up at 12 times next year's numbers.

Lucent (LU:NYSE, $3.30, 40,000 shares, 3.73%): The company held a fabulous full day analyst meeting that I watched on Thursday. Most of the analysts are in wait and see mode, but I can't afford to miss this move. I am telling you that this company will announce some major contract wins in the next 60 days that will propel the stock to $4. It's not too late to get in if you aren't long the stock yet.

Nortel (NT:NYSE, $3.96, 92,500 shares, 10.36%): This stock is ridiculously undervalued vs. how it is turning things around. That's why I bought 5,000 shares on Thursday, making this the single-largest holding in the portfolio. The company is meeting with big fund managers to tell its story and regain some credibility on the Street. Why the analysts are being so cautious here makes no sense to me, but I don't mind being long the stock when companies like Nokia are preannouncing to the upside. I will take this position toward 100,000 shares if I have to on the next pullback.

Urban Outfitters (URBN:Nasdaq, $33.60, 1,500 shares, 1.43%): Started this position with 1,500 shares on Friday. I had waited long enough for a pullback, but grew increasingly confident that one wouldn't come anytime soon. The comps are on fire, and management is positioned to grow its store count a lot over the next few years. You just don't find high-growth retailers like this anymore. The growth potential is as far as the eye can see and I just don't get how anyone could favor a declining business model like Gap (GPS) over this company.

TWOS

Comcast (CMCSA:Nasdaq, $28, 7,500 shares, 5.94%): The company guided costs down this week but nobody cared because cable is so hated. This is one of the longest stretches I can recall in which cable has been this hated and I don't expect it to stay this way much longer. I have bought stock repeatedly here and can't buy more until it goes to $26.

Commerce Bancorp (CBH:NYSE, $56.14, 2,500 shares, 3.97%): The bears are giving in and covering. I expect the stock to go to $60 when it reports in mid-October based on management's bullish statements in an 8-K filed this week. Raymond James upgraded the stock on Friday and I expect more upgrades to come. No, I am not ignoring the federal charges, I am just saying that it seems contained to Pennsylvania. The company has gotten out of the municipal bond business, so there is no reason whatsoever to pursue them at this point.

Cumulus Media (CMLS:Nasdaq, $14.41, 12,000 shares, 4.89%): Here is a totally hated stock in a totally hated sector -- radio -- that I am now convinced is going through a radical revaluation in the market's eyes and won't lift until the company can start buying stock back aggressively. But I don't think this scenario can play out until the stock goes to the $12 level, and I am holding off buying more until we get there.

Fortune Brands (FO:NYSE, $72.99, 1,500 shares, 3.10%): I am hearing the company is having a great fall and I expect it can trade back to its old high of over $80 a share. Analysts are optimistic on Therma-Tru's business, which the company acquired last November, and I expect this great franchise to continue to weather an economic slowdown as it has done in the past. I own a ton of stock at lower levels and will wait for a pullback to add more.

Halliburton (HAL:NYSE, $30.31, 3,000 shares, 2.57%): A battleground stock that has lifted nicely with the decline of bad headlines. This week the government said it is going to allow companies to rebid for the Iraqi business that Halliburton has been accused of overcharging for. That said, I don't mind owning a stock that holds up well under a negative news barrage, and I am a buyer under $26.

Houston Exploration (THX:NYSE, $55.31, 2,000 shares, 3.13%): Big week for the stock, which finally broke out of its trading range. I think Houston is one of the cheapest energy stocks I know in the patch. The stock is trading at a single-digit multiple and the path of least resistance from here is up, as long as oil prices remain high.

J.P. Morgan (JPM:NYSE, $39.80, 3,500 shares, 3.94%): Stock challenged the $40 level and I continue to think it is the cheapest large-cap bank stock in the business. I would not be surprised if this stock goes to $42-43 after it reports earnings next month, and will look to build up my stake on any pullback.

Kmart Holding (KMRT:Nasdaq, $82.77, 2,000 shares, 4.68%): Remember, starting in three months this company will be annualizing easy comparisons. I continue to think there are many ways to win in Kmart. That said, I have discipline and have taken half of the position off the table. I will let the rest of my stake run as the company continues to realize value in its real estate. Eddie Lampert isn't going to cut and run anytime soon.

Toyota Motor (TM:NYSE ADR, $77.19, 3,500 shares, 7.64%): It is the only auto company with momentum, and its biggest problem is it can't make enough cars! General Motors (GM) and Ford (F) would kill for that problem right now. I'll look to add more to my stake under $75.

UnitedHealth Group (UNH:NYSE, $68.87, 3,000 shares, 5.84%): Really took off this week as it is becoming apparent the company has one of the most predictable earnings streams in the health care universe. The company confirmed its full- year outlook on Friday and, as I said last week, this stock could very well trade up to $70 a share as the market clamors for steady growers. There is nothing more immune to the economy than health care.

Yahoo! (YHOO:Nasdaq, $31.08, 1,500 shares, 1.32%): Looks like another good quarter is ahead for Yahoo!, and the company is testing out the online travel space as well. The stock is up 35% this year vs. a 6% decline in the Nasdaq. I won't chase it at this level but am plenty glad I own it ahead of its October earnings report.

Zimmer Holdings (ZMH:NYSE, $75.71, 1,500 shares, 3.21%): I am convinced that this is a misunderstood stock. The company should be trading at a premium to the medical device stocks, not in line as it is now. Does anyone really think that the artificial-knee-and-hip business is slowing? Last I checked the segment of the population that will drive its business is actually growing at the fastest clip in history. I own the stock a lot lower and am waiting for another leg up before closing this position out.

Threes

Intel (INTC:Nasdaq, $20.57, 3,000 shares, 1.74%): Too late to sell and too early to buy more of this house of pain. This is no-man's land for Intel. The growth guys want nothing to do with the stock, and the value players don't trust next year's numbers enough to pay 18 times yet. Lehman downgraded the stock this week, and I intend to move out of this stock if it goes back to $24 in the near term. I will put the money to work in some of my One-rated names.

Univision (UVN:NYSE, $32.28, 4,000 shares, 3.65%): This company remains a show-me stock. Wait, didn't Univision show us all last quarter when the company crushed forecasts? Kind of nutty, but we are in a nutty market. I am frozen on the stock at this level and will wait for the next round of strength to move out of Univision.

Fours

EMC (EMC:NYSE, $11.15, 3,500 shares, 1.10%): This stock is just too tough to own. I was hoping to sell it if it hit $11 and it is here, so the sale is just a matter of time. I would rather bottom-fish elsewhere in this market and would replace it with more stock in growing companies like Nortel, Lucent and JDS Uniphase.

Regards,

James J. Cramer

DISCLOSURE: At the time of publication, Cramer was long American Physicians Capital, Cabela's, Charter Communications, Comcast, Commerce Bancorp, Cumulus Media, EMC, Fortune Brands, Halliburton, Houston Exploration, Intel, JDS Uniphase, J.P. Morgan, Kellogg, Kerr-McGee, Kmart Holding, Lucent, Nortel, Toyota Motor, UnitedHealth Group, Univision, Urban Outfitters, Yahoo! and Zimmer Holdings.