Jim Cramer's Action Alerts PLUS Weekly Roundup

Another good week in the market, in which our performance once again was held back by Nortel (NT) . That stock now is rated a Four, and I'll use any strength to cut back my stake when my restrictions allow.

The only problem when stocks take off like we've seen in the past few weeks is that not too long afterward, we see a crash. You readers know that I prefer to see the market move upward in a stair-step fashion because such moves generally prove more sustainable.

I say this because my favorite technical indicators tell me the market is reaching overbought levels. You'll notice fewer One-rated stocks this week, and my tendency in the near term will be to raise cash and eventually redeploy assets into some new areas.

Two sectors on my radar screen right now are brokerages and water stocks. Both look very attractive relative to the broader market at these levels, and have been quietly building momentum. Some of my favorite names in these groups include E*Trade (ET) , Goldman Sachs (GS) , Aqua America (WTR) and Pentair (PNR) . Of course, I'll send out an email alert before I take any action in the portfolio.

(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, $33.29, 2,500 shares, 2.28% of the portfolio): The company reported solid third-quarter earnings Monday, though the stock was little changed for the week. I believe the company remains well positioned to expand its margins over the coming quarters, and that it can trade up to $40 in the new year.

Cabela's (CAB:NYSE, $23.07, 5,000 shares, 3.17%): While I had been less bullish on the retailer in recent weeks, I believe the stock now has reached oversold levels. I picked up a total of 1,500 shares this week, and believe the $22.50, 10.5 million-share secondary offering this week will mark the near-term low in the stock. The past two quarters have been disappointing but the company is entering its peak selling season. And I believe that Cabela's is just one good quarter away from being a $30 stock once again.

Cendant (CD:NYSE, $22.90, 2,500 shares, 1.57%): An inexpensive stock at 13 times earnings, and management supports the shares with its repurchase program and the dividend. The company has a great cluster of assets in the travel and real estate sectors, and I believe the Orbitz acquisition will prove to have been done at an excellent price a few years down the road. As a reminder, we'll qualify for Cendant's next 9-cent quarterly dividend at the close of trading on Nov. 17.

J.P. Morgan (JPM:NYSE, $39.17, 3,500 shares, 3.76%): Alluded in its 10-Q filing this week that the capital markets and trading environment remain difficult. That said, the bank is well positioned for the current rate environment, and should continue to realize synergies from the Bank One merger in 2005. I also believe management has the capacity to raise the 3.5% dividend in the near future.

Kerr-McGee (KMG:NYSE, $59.29, 2,500 shares, 4.07%): Declared its latest 45-cent quarterly dividend this week, payable on Jan. 3 to investors at the close of trading on Nov. 30. Kerr-McGee remains one of the best values in the energy space, and the shares remain attractive to purchase below $60.

Lucent (LU:NYSE, $3.90, 40,000 shares, 4.28%): As bad as Nortel's been, this stock continues to push higher. We've made some good coin with Lucent in recent months, even though no one else would give the company the time of day when we started buying it in August. The shares added 9% this week as it settled some major labor issues and received final approval for its $861 million tax refund. I'd use any pullback to add to my position if my restrictions allowed. After possibly a short breather around the $4 level, I believe the shares can see $5 in the coming months.

Symbol Technologies (SBL:NYSE, $15.24, 7,500 shares, 3.14%): Bought 1,000 shares Monday as the stock pulled back a dollar. The company will have to delay its 10-Q by two weeks this quarter because of an inventory-reporting correction at a distribution partner. Even though Symbol has had some accounting problems in the past, I have a lot of confidence in the new management team here and don't believe this news will have a lasting impact on the stock. As the company continues to see new orders rolling in for its RFID (radio frequency identity) solutions, shares of Symbol could trade up toward $20 in the coming months.

TWOS

Comcast (CMCSA:Nasdaq, $29.83, 7,500 shares, 6.14%): Remains very much in the mix to end up with at least a chunk of Adelphia's assets. Comcast remains attractive at these levels for folks who can be patient enough to hold onto the stock for a couple of quarters.

Commerce Bancorp (CBH:NYSE, $60.15, 2,000 shares, 3.30%): I'm less inclined to pay these prices for the bank than I'd be to sell another 500 shares if Commerce ran over $62 in the near term.

Cumulus Media (CMLS:Nasdaq, $15.52, 10,000 shares, 4.26%): Remain confident that the buyback support and the gradually improving ad-sales market can take the stock back to the high teens over time.

EnCana (ECA:NYSE, $52.61, 2,500 shares, 3.61%): Went out at a new 52-week high on Friday but the stock remains attractive at just 10 times expected 2005 earnings. I believe Encana has 8 points upside potential compared with 2 points to the downside in the near term.

Fortune Brands (FO:NYSE, $76.56, 2,000 shares, 4.20%): Another stock that went out at a new 52-week high on Friday. At just 15 times expected 2005 earnings and with a solid dividend, I believe Fortune can continue to move gradually higher. With that in mind, I'd wait for it to reach $80 before I started selling my stake.

Halliburton (HAL:NYSE, $38, 1,500 shares, 1.56%): Seems to finally be close to settling its asbestos issues. With that behind the company, I believe Halliburton could trade into the low-$40s and still appear attractive relative to its peers.

JDS Uniphase (JDSU:Nasdaq, $3.15, 40,000 shares, 3.46%): I'll continue to bide my time here because management has finally taken expectations down far enough for 2005. The company has a solid balance sheet, and I believe that orders eventually will recover. That said, I'd wait until JDS fell below $3 before I added to my stake.

Kimberly-Clark (KMB:NYSE, $63.25, 3,500 shares, 6.08%): Hearing the company might try to tag along with Georgia- Pacific's (GP) double-digit price increase in the commercial tissue sector. The stock is now up 4 points from the bottom, and I'd consider taking 500 shares off the table if Kimberly continued to trade up to $65.

Toyota Motor (TM:NYSE ADR, $78.24, 3,500 shares, 7.52%): The Scion unit raised its sales guidance this week as the company continues to see strong demand for its youth- oriented entry-level designs. Even though the company has a lot of sales momentum behind it, the stock has remained in a narrow trading range. If Toyota crossed over $80, I'd consider paring back 500 shares.

Urban Outfitters (URBN:Nasdaq, $47.09, 2,500 shares, 3.23%): As expected, the company reported solid third- quarter earnings Thursday. Urban got hit with some quick profit-taking but the stock has regained all of that ground and more, going out at yet another new 52-week high Friday. I believe the company is carrying a lot of momentum into the holiday season, and the shares could gain another 10 points by the time the retailer reports its January quarter. That said, there's nothing wrong if you readers feel like taking some profits as Urban reaches $50 and playing with the house's money from there.

THREES

Charter Communications (CHTR:Nasdaq, $2.68, 105,000 shares, 7.73%): With competition heating up in the bid to acquire Adelphia's assets, I believe that speculators also will look to buy up Charter in the near term. Although I can't make the trade myself, I believe you readers could make a quick 10%-20% profit, buying the stock at these levels. But keep a short leash on this trade, as Charter is the only stock that's disappointed us as much as Nortel has this year.

Houston Exploration (THX:NYSE, $57.33, 1,500 shares, 2.36%): I'll continue to pare my stake into strength, as I believe that Encana and Kerr-McGee have better upside potential from here.

Kellogg (K:NYSE, $45, 1,000 shares, 1.24%): I'm sitting on nearly a 10% gain with this position, and the stock went out Friday at a new high. Kellogg never did pull back enough for me to build this stake further, and I'd consider booking the profit here when my restrictions allow, to open up the space to add a new position.

Kmart Holding (KMRT:Nasdaq, $105.99, 2,000 shares, 5.82%): Tacked on 11% for the week, ahead of Monday's earnings report. Now that the position is officially a double, you readers might want to book some profits. I'm personally restricted from trading Kmart right here, but the company should post impressive sales against relatively easy comps this holiday season, and I believe the shares can ultimately see $120.

UnitedHealth Group (UNH:NYSE, $81.50, 1,000 shares, 2.24%): Held an upbeat investor meeting Wednesday, and the stock traded up over $82 the next day. Even so, I find it hard to sell such a great company that's valued at just 17 times expected 2005 earnings and can grow in the double digits organically. I'm not hungry for too many open slots in the portfolio right now and I'm confident that the stock will be trading higher a few months down the road.

Yahoo! (YHOO:Nasdaq, $37.80, 1,500 shares, 1.56%): Not worried about Microsoft's (MSFT) new search product taking too much business away from Yahoo!. The bullish call from Morgan Stanley this week could give Yahoo! the momentum it needs to trade over $40, where I'd consider taking some profits.

FOURS

Intel (INTC:Nasdaq, $23.69, 3,000 shares, 1.95%): Flattish week for the stock, though competitor Advanced Micro Devices (AMD) gained 3 points on reports that it's taking market share. New dividend or not, at the end of the day I'd look to close out my Intel stake at or above these levels, if my restrictions ever allowed me to do so.

Nortel Networks (NT:NYSE, $3.03, 92,500 shares, 7.69%): Without fail, management found a new way this week to disappoint investors. While I don't think it's likely that Nortel will end up being delisted by the New York Stock Exchange, there's also very little chance the stock can recover until the company files a clean set of financials. With that in mind, don't be tempted to bottom-fish with Nortel down here, because the shares easily could head lower. If anything, I'd rather pare back my stake into strength as my restrictions allow.

Regards,

James J. Cramer

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