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Dow Jones S&P 500 NASDAQ 10-Year Note
10,463.94 1,110.04 2,210.38 35.90
Oil *
72.16
DOWN
37.11
DOWN
4.07
DOWN
1.72
UP
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10 Yr
3.59%
SPDR Gold
110.00
-0.35%
-0.37%
-0.08%
+1.24%
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RealMoney.com : Action Alert!


Action Alert Weekly Roundup

By James J. Cramer

12/15/2001 10:34 AM EST

Given that the market seems to have done nothing but go straight down since I reviewed the portfolio last week, what can I say? We could have done worse. About the best thing I have done since I started this project is blast some of the stocks I have owned. (To see my portfolio, click here.)

Last week it was Halliburton (HAL:NYSE - news - commentary - research - analysis). This week it was Merck (MRK:NYSE - news - commentary - research - analysis), Fluor (FLR:NYSE - news - commentary - research - analysis) and Qwest (Q:NYSE - news - commentary - research - analysis). I made my career on Wall Street cutting my losses and letting my gains run. But because of my trading restrictions, I am not able to cut my losses. Through the Action Alert Plus program, though, I have been alerting you (if you subscribe) that I would be selling certain stocks aggressively and, fortunately, if you take the service, I believe you would have been short Fluor, Qwest, Merck and Hal. Bad for me; good for you.

Let's go to the actuals:

Aetna (AET:NYSE - news - commentary - research - analysis): Aetna took a big charge and let a lot of people go this week, which is the right thing for the shareholders because the company is too big, considering how it is aggressively knocking people off the rolls and shrinking its business. I thought the stock should have rallied on the news, but this is a total show-me situation and it is really going to be difficult to win people over to buy this stock until the company is profitable. I would buy up to $33.

Alcoa (AA:NYSE - news - commentary - research - analysis): Here's a stock that goes up or down depending upon who says what about next year's economic growth. If you think we are going to grow 3% or more next year, you have to buy this stock now. If you think that growth will be slower than that, it is going to be a range-bound stock and it is currently near the upper end of its range. I would buy the stock below $35 if it comes in, as I think it is priced for 2% growth at that level.

AmerisourceBergen (ABC:NYSE - news - commentary - research - analysis): Stock languishes. I used to say stocks like this were stuck in the mud. That means they can't seem to go anywhere. Sometimes stocks stuck in the mud are just biding time before going up. I think that's the case with ABC. I am conscious now that ABC had this great move and I rode it down, something that makes me angry, but I am helpless to do anything about it because of the restrictions. If I thought the story changed, I could sell it now, but I think it is still a good one and I don't want to abandon it because, selling at 18 times next year's earnings, the stock is a bargain. Why haven't I bought more? I want to wait until it goes 10 points below my average, where a buy of 1000 shares would be meaningful.

AOL Time Warner (AOL:NYSE - news - commentary - research - analysis): Oh, the pain of this one. I can't tell you how tortured I feel about AOL. On the one hand, it is the ultimate dot-com winner, a huge subscription machine and a well-oiled movie and multimedia company. On the other hand, who knows what is happening up top? I think Dick Parsons is tremendous, but he is from neither media nor the Web. He is a banker. Is that who should be running AOL Time Warner? And where is the growth going to come from next year if advertising stays stalled? This stock is a total quandary. I am reluctant to sell it because I believe it could be a big stock again if the economy picks up. I am reluctant to buy more because the company's near-term fundamentals are so under question. I know it has a huge subscription base and has a great movie production company, but isn't that why it is already a huge stock? So I own a little, and I wait and I worry. Not optimal.

Bank of America (BAC:NYSE - news - commentary - research - analysis): Amazingly, this stock is still digesting that supply that was laid down on it about 10 days ago. It seems stuck at the $61-$62 level. I think that's an opportunity. When I was in the hedge fund business I would play this yield curve for lots of overnight cash, and I ran only $300 million. BAC has a gigantic deposit base to lever, and I believe it is doing so. This one can be bought here.

Best Buy (BBY:NYSE - news - commentary - research - analysis): This stock had a giant Xbox and Christmas-related move. I then took some off the table at $70 because I fear that it has moved too much. I wouldn't buy it up here and would instead wait for a pullback. Had I not sold some stock up here, I would do so now.

Caterpillar (CAT:NYSE - news - commentary - research - analysis): If the economy doesn't come roaring back it will trade down to the middle $40s. It probably won't go lower though because it has too much earnings power.

ChevronTexaco (CVX:NYSE - news - commentary - research - analysis): Soon this will be my lone oil stock after a very aggressive purge of the portfolio given that oil has come down so much. Again, I would not be long this stock if it weren't for the merger. That's what makes it worthwhile because the cost-cutting effort will be huge.

Cisco (CSCO:Nasdaq - news - commentary - research - analysis): People sold this stock on the Lucent (LU:NYSE - news - commentary - research - analysis) news, which I guess means people will sell it on the Nortel (NT:NYSE - news - commentary - research - analysis) news when that happens. So why buy more yet? Take advantage of the market's knee-jerk nature and wait to buy the stock.

Citigroup (C:NYSE - news - commentary - research - analysis): Like Bank of America, this company can play the yield curve. But it also has a high cost structure at Salomon Smith Barney, and I think that the broker is keeping the earnings from breaking out here. As the largest bank in the world, too, Citi is stuck with a worldwide economy that is still slowing. Inexpensive story, though.

Clorox (CLX:NYSE - news - commentary - research - analysis): What the heck? This company preannounces and the stock doesn't go up? That's dumb. Found myself scrambling for cash so I could buy more, but I am locked in too many places. This company should be bought right here.

Conexant (CNXT:Nasdaq - news - commentary - research - analysis): Sold down with Ciena (CIEN:Nasdaq - news - commentary - research - analysis). Conexant's strong business is cell phone chips, not equipment that competes with Ciena. But the market can't distinguish among players. I would buy more of this stock if I could stop talking about it on radio and TV.

Dell (DELL:Nasdaq - news - commentary - research - analysis): Strong stock. I found myself joking with hedge fund managers this week about how tech has become a safe haven with Dell being among the safer places out there! Irony of ironies!

EMC (EMC:NYSE - news - commentary - research - analysis): Company is not doing well enough to ramp here, but it is too low to sell. I think that the thing to remember about EMC is that the expectations are nice and low, so when it reports, it should go higher. But make no mistake about it, EMC is no longer a big stock.

General Electric (GE:NYSE - news - commentary - research - analysis) Battered by turbine woes, I think this stock has come down to attractive levels. It is not cheap, but GE has never been cheap. Tarnished by a reporter in the Times this week who linked it with Enron. I thought that was outrageous, just outrageous. GE's balance sheet is strong and its financial controls the best in the world.

Guidant (GDT:NYSE - news - commentary - research - analysis): Stock has had quite a move and is now vulnerable to a pullback because of the rotation out of health care. Business is good though.

HCA (HCA:NYSE - news - commentary - research - analysis): Another stuck-in-the-mud story that I like very much and am not about to give up on just because it isn't going anywhere. Earnings are coming through, the multiple is low, growth is good regardless of the economy, that's what I want out of an equity.

IBM (IBM:NYSE - news - commentary - research - analysis): This stock should get a nice spike if there is ever a stimulus bill passed. When it happens you might want to take a little off the table.

Read More
Click here for the latest from James J. Cramer

Microsoft (MSFT:Nasdaq - news - commentary - research - analysis): Biding time ahead of earnings. Big cash hoard, business is solid, nothing new.

Morgan Stanley Dean Witter (MWD:NYSE - news - commentary - research - analysis): My lone, pure broker stock. I felt it represented an interesting risk reward after E*Trade (ET:NYSE - news - commentary - research - analysis) preannounced to the upside. Morgan's not expensive on normalized earnings; worth holding on to.

Nokia (NOK:NYSE ADR - news - commentary - research - analysis): Stock announced that earnings were ahead of expectations, and I think the stock is back to being a must-own. Share-taker in an industry that is still fast-growing.

Oracle (ORCL:Nasdaq - news - commentary - research - analysis): Ellison says the bottom is here. I know some think he has been calling the bottom since August, but the company really went out on a limb this week to say things are better and I believe them. This stock is not expensive if this company believes that orders are turning.

PepsiCo (PEP:NYSE - news - commentary - research - analysis): Bought more this week. I think this kind of stock is making a comeback as we recognize that growth won't be that robust in the first half of next year.

Pfizer (PFE:NYSE - news - commentary - research - analysis): Asbestos hit Pfizer this week. Pfizer is insured and the claims are small. It is not in the same boat as HAL. Why am I so certain? Because not all claims are created equally. Pfizer's and Viacom's are not going to trial. HAL's are. And HAL is losing.

Philip Morris (MO:NYSE - news - commentary - research - analysis): Stock is marking time as other, more aggressive, stocks get bid up. I like this one very much because of its yield and its consistency.

Schlumberger (SLB:NYSE - news - commentary - research - analysis): Selling it. I think its earnings will be not so hot because of the decline in oil prices and the now-already-too-warm winter.

Target (TGT:NYSE - news - commentary - research - analysis): If we could just get some cold weather to eat through all of that cold-weather inventory, I would feel better about this stock. Otherwise, I would wait until it pulled back.

TRW (TRW:NYSE - news - commentary - research - analysis): Beneficiary of defense spending, but I would be a seller up here because of uncertain balance sheet.

United Technologies (UTX:NYSE - news - commentary - research - analysis): Reaffirmed great growth and made me feel as if UTX has fully recovered from 9/11. Really strong company.

UnitedHealth (UNH:NYSE - news - commentary - research - analysis): Still the strongest growth story out there and still cheap. Still a buy.

Universal Health Realty (UHT:NYSE - news - commentary - research - analysis): Throws off a good dividend but would only use it for that.

Verizon (VZ:NYSE - news - commentary - research - analysis): Disappointed that this stock doesn't have more oomph. Will be protected from downside by its dividend. A share-taker.

Viacom (VIA.B:NYSE - news - commentary - research - analysis): Rocked by asbestos claims. Remember, these claims are not all equal. The ones against VIA have been protected by insurance to date and I think will continue to do so.

Wells Fargo (WFC:NYSE - news - commentary - research - analysis): Beginning to creep up but not as fast as I would like. I believe this stock is going to vault to $50 in the early part of next year.


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TheStreet Directory

Dow Jones S&P 500 NASDAQ 10-Year Note
10,463.94 1,110.04 2,210.38 35.90
Oil *
72.16
DOWN
37.11
DOWN
4.07
DOWN
1.72
UP
0.44
10 Yr
3.59%
SPDR Gold
110.00
-0.35%
-0.37%
-0.08%
+1.24%
Data delayed 20 minutes


James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. At the time of publication, Cramer was long Aetna, Alcoa, AmerisourceBergen, AOL Time Warner, Bank of America, Best Buy, Caterpillar, ChevronTexaco, Cisco, Citigroup, Clorox, Conexant, Constellation Energy Group, Dell, EMC, Fluor, General Dynamics, General Electric, Guidant, Halliburton, HCA, IBM, Merck, Microsoft, Morgan Stanley Dean Witter, Nokia, Oracle, PepsiCo, Pfizer, Philip Morris, Schlumberger, Target, TRW, United Technologies, UnitedHealth Group, Universal Health Realty, Verizon, Viacom and Wells Fargo. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to jjcletters@realmoney.com.
Read our conflicts and disclosure policy.
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Sorry, the page you requested could not be found

Sorry that you couldn't find the page you wanted.

Here are a couple of ways that can help you find that information successfully.

Content Search:

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TheStreet Directory

Dow Jones S&P 500 NASDAQ 10-Year Note
10,463.94 1,110.04 2,210.38 35.90
Oil *
72.16
DOWN
37.11
DOWN
4.07
DOWN
1.72
UP
0.44
10 Yr
3.59%
SPDR Gold
110.00
-0.35%
-0.37%
-0.08%
+1.24%
Data delayed 20 minutes