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Tweaking Pentair, Cimarex Exposure

Paring back one position frees up cash for Cramer to build another.
Author:

Editor's Note: This was sent to subscribers of Action Alerts PLUS on May 9 at 11:17 a.m. EDT.

Pentair

(PNR) - Get Report

has grown to be my second-largest holding, and I am going to pare back 500 shares after you read this. At $41.54, the stock has gained more than 10% in the past month. This sale will lower my stake to 5,000 shares, or about 5.7% of my overall portfolio. I maintain that there is potential for consistent growth in the water business, but want to realize some of the recent gains in Pentair.

I will use some of these funds to buy 500 shares of

Cimarex Energy

(XEC) - Get Report

, which is at $36.48. The stock is very attractive at just 9 times earnings, ahead of the expected close of the

Magnum Hunter

TheStreet Recommends

(MHR)

deal later this month. Once the arbitrage selling-pressure subsides, I believe Cimarex will be worth at least $39. This purchase will give me a total of 5,000 XEC shares, or about 5% of my portfolio.

At the time of publication, Cramer was long Pentair and Cimarex Energy.

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. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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