Jim Cramer's Action Alerts PLUS Weekly Roundup

What a weak week. After the Fed raised rates on Tuesday, the profit-takers came in, shearing 200 points off the Dow. I wish I could say that things will be better next week, but I won't sugarcoat things.

If anything, there could be some quarter-end buying by the fund managers early in the week, which I'd use to raise more cash. I already have 8.4% of my portfolio liquid, and would consider going to more than 10% because we're entering the heart of earnings-warning, tax-loss selling season.

Energy will continue to work in this market. Why? Because these companies are coining money, yet the sector accounts for only 7% of the S&P 500. The analysts still are moving their estimates higher and probably won't catch up to the potential earnings power of the Kerr-McGees (KMG) out there.

Financials also remain solid, even with this latest interest rate hike from the Fed. This week I'm adding two more sectors to the camp of sectors that are buyable: defense and transports. Given the latest comments from the Kerry camp, I believe the former will continue to see solid spending no matter who wins the election.

Meanwhile, the transports look cheap relative to the rest of the market, even though they are experiencing a steady pickup in demand. The next step is to look for the best individual names in these industries, and I'll alert you readers to what I find as soon as I finish my homework.

(Remember, in my rating system, Ones are stocks I would buy right now, Twos are stocks that 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, $30.00, 1,500 shares, 1.30% of total portfolio): Would look to add another 500 shares on the next pullback. The company is the only pure-play malpractice insurer, and I believe the industry will see some sweeping liability reform in the near future.

Comcast (CMCSA:Nasdaq, $28.14, 7,500 shares, 6.08%): The Sony (SNE:NYSE ADR)/MGM (MGM) content deal is a major positive, and the company also would benefit if it could pick up some of Adelphia's assets in an asset swap. After trading in a tight range for the past six weeks, I believe that Comcast is prime to run back above $30 ahead of the Oct. 27 earnings report.

Cumulus Media (CMLS:Nasdaq, $14.04, 14,000 shares, 5.67%): Added 2,000 shares on Friday. Sellers have disappeared for the time being, and I believe Cumulus has limited downside. The company is the second-largest radio operator and could win multiple ways as the industry consolidates.

Houston Exploration (THX:NYSE, $57.18, 2,000 shares, 3.30%): Ended the week at a new 52-week high. The company bought $145 million of assets in the Gulf of Mexico this week that should be accretive to earnings. The stock still trades for less than 10 times conservative estimates, and I don't think Houston will stop until the stock moves into the $60s.

J.P. Morgan (JPM:NYSE, $39.75, 3,500 shares, 4.01%): Jamie Dimon made his first big round of management changes this week, and I favor the new CEO exerting more of his influence at the bank. I continue to believe that financials are one of the few areas that will work here, and J.P. Morgan is my favorite bank at these levels. We'll qualify for the company's next 34-cent quarterly dividend at the close of trading on Oct. 1.

Kellogg (K:NYSE, $41.44, 1,000 shares, 1.19%): Despite this week's warning from General Mills (GIS) , I believe the company is still on track to achieve its goals this quarter. Kellogg is maintaining share in cereal and the snack business continues to improve. Management is budgeting $900 million of excess cash flow through 2005, which should allow the company to buy back more stock. I want to own more shares, but won't violate my cost basis to do so.

Kerr-McGee (KMG:NYSE, $57.31, 2,500 shares, 4.13%): Sell- side analysts are bringing up their estimates again to account for higher energy prices. I believe Kerr-McGee is attractive to purchase as long as the yield remains above 3%.

Kimberly-Clark (KMB:NYSE, $65.01, 1,000 shares, 1.87%): Initiated a position on Tuesday. The stock has been selling off on earnings warnings from its peers, but the company doesn't share the problems that Colgate (CL) and Unilever (UN) have. In fact, Procter & Gamble (PG) is pulling back on its price war in the paper products business. Throw in the company's 2.5% dividend, and I believe we have a stock that will be a leader in a low-growth environment.

Lucent (LU:NYSE, $3.18, 40,000 shares, 3.67%): Spoke with CEO Patricia Russo on my television show this week. The company also reduced retiree benefits for the second time this year. Now that Lucent has its core business back on track, this remains management's most pressing issue. I'd build my position up to 50,000 shares if the stock continued to slide down to $3.

Toyota Motor (TM:NYSE ADR, $75.05, 3,500 shares, 7.57%): Boosted European volume guidance this week. Toyota is flush with cash, and carries a lot of momentum into the end of the year. I already have a large position, but would buy another 500 shares if Toyota traded down to $73.

Urban Outfitters (URBN:Nasdaq, $33.64, 2,500 shares, 2.42%): Great retail model with a savvy knack for merchandising. I'd be ready to make my next purchase below $33, when my restrictions allow.

TWOS

Cabela's (CAB:NYSE, $24.69, 3,500 shares, 2.49%): Quiet week for the retailer, but remember that the company's growth will ramp as it continues to open new mega-outlets. I'd look to buy 500 shares if Cabela's fell below $24.

Commerce Bancorp (CBH:NYSE, $55.73, 2,500 shares, 4.02%): Fastest-growing bank you can get for your money, and the sector should remain hot with the Fed on hold. As a reminder, we'll qualify for Commerce's next 19-cent quarterly dividend at the close of trading on Oct. 29.

Fortune Brands (FO:NYSE, $73.29, 1,500 shares, 3.17%): The stock is only 3 points above my cost basis, but the company remains a core holding in the portfolio. Again, I believe that Fortune can rise above the sea of recent consumer noncyclical earnings warnings. The company has a portfolio of market-leading brands and a diversified business mix that can absorb short-term weakness in one area.

JDS Uniphase (JDSU:Nasdaq, $3.35, 55,000 shares, 5.31%): Alerted you readers earlier in the week that I wanted to take 5,000 shares off the table around $3.60. I couldn't take action that day, but remain interested in making the trade when my restrictions allow. I believe that demand will continue to build in the fiber space, but also am cognizant that JDS Uniphase trades higher than where it was after reporting solid numbers in July.

Kmart Holding (KMRT:Nasdaq, $86.30, 2,000 shares, 4.98%): Its stock took a breather this week, but I still believe this retailer will trade in the triple digits before year- end. Kmart faces some easy comps in the last few months of the year, and this week's dramatic recovery in the value of the Martha Stewart brand couldn't hurt either.

Yahoo! (YHOO:Nasdaq, $32.58, 1,500 shares, 1.41%): The Internet ad business is the strongest its been since the late '90s. Yahoo! might not be the cheapest stock in the market, but you're buying into a brand that has visibility for multiple years of solid growth.

THREES

Charter Communications (CHTR:Nasdaq, $2.80, 92,500 shares, 7.47%): I think we're right for not buying more down here. Aryeh Bourkoff of UBS, who I believe is the best cable analyst out there, issued a bearish note this week, and he also believes the recent executive departures are a sign the stock is going to report another poor quarter.

Halliburton (HAL:NYSE, $33.58, 1,500 shares, 1.45%): Unloaded 1,000 shares Monday, ahead of the company's analyst meeting. I sold another 500 on Friday, after it concluded. There, management said that it's willing to sell the KBR division if it can't turn it around first. Halliburton also plans to raise rig rates for its core drilling business. That said, the net effect of the company's political and legal issues lead me to believe that Halliburton will continue to underperform its peers.

Intel (INTC:Nasdaq, $20.13, 3,000 shares, 1.74%): Company is stuck in neutral, and I'd consider unloading my position if the shares rallied to $22.

Nortel (NT:NYSE, $3.41, 92,500 shares, 9.09%): The company will provide more details next week on where the latest round of 3,500 job cuts will be taken. Now that we already have a sizable position on the sheets, I believe we need to remain on the sidelines until management can give us a better look into just how strong Nortel's business is.

UnitedHealth Group (UNH:NYSE, $71.33, 2,000 shares, 4.11%): Pared back 500 shares Wednesday with the stock nearly 10 points above my cost basis. Even though I believe the company will continue to be a fixture on the 52-week high list, we can't afford to be greedy with our winning positions in the current environment.

Zimmer Holdings (ZMH:NYSE, $79.62, 1,000 shares, 2.29%): Sold another 500 shares Wednesday to raise cash to build up my One-rated stocks. I'm holding on to the remainder of my position for now because I believe that Zimmer could move 4 or 5 points higher when it reports third-quarter results.

FOURS

Univision (UVN:NYSE, $32.67, 3,000 shares, 2.83%): Sold 1,000 shares on Friday. At this point, I'm essentially holding this position for sale until I find another stock to take its place. Univision is a great company with a lot of momentum behind it but the shares have not been able to sustain any gains.

Regards,

James J. Cramer

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