For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"Homebuilders have been in a slump, to say the least," says Jim Farrish, editor of Sector Exchange.
"The technical charts on homebuilders look very similar to those of technology stocks during their rise from 1998-2000. In fact, the index has declined more than 70% peak to trough. Looking toward 2008 and the housing market, we could start to see a turnaround.
"The start is likely to be government aided, which is why we like this as an aggressive play, as the Federal government will put more money into fixing something than corporate America. Current proposals will not come close to fixing it, but will at least put a band aid on the situation and allow the healing process to begin.
"Our vote to benefit here would be Toll Brothers (NYSE: TOL). The company has one of the better-looking balance sheets in the industry and management has done a fairly good job of dealing with this downside market.
"Its weekly chart shows a decline from a high of $55 to a current price of $22. Their stock has found support near the $19.50 mark and has developed a trading range since July with the top at $23.50. With the stock currently near the high end of the trading range, we would look for a breakout as a buy point."If sales increase throughout 2008, we would look for the stock to rise near the $34 mark. There are a lot of things that need to come together for this play to achieve its goal, but then that is what makes it an aggressive opportunity.
"Thus, our entry point would be a break above $23.50 or accumulate shares on a pullback near the bottom of the trading range. Our stop would be $18 and the target $34."











Reader Comments (Page 1 of 1)
12-31-2007 @ 2:29AM
Rex said...
Uh, Toll Brothers insiders dumped a massive amount of shares in December 2007. I do not find such actions to be a vote of confidence in the price of TOL stock. My read of Robert Toll's Dec Form4 shows about 162,000 shares SOLD by him in December. Several other Toll insiders were big sellers in December 2007. Am I reading RT's Form4 wrong? See for your self at: http://www.insidercow.com/forms/20071112/0000794170-07-000017.xml