Although Louis Navellier expects a lot more volatility due to the attacks, he thinks it's the time to buy. If history is any guide, says Navellier, whose Navellier & Associates steers $6 billion, investors "will miss a great chance" if they ignore the values that abound after a catastrophic event or a horrendous market crash.
A sector that he thinks offers attractive values is homebuilding, and he is bullish on little-known Crossmann Communities (CROS ): It builds low-cost, entry-level houses in the Midwest and Southeast.
The stock, at 23 a share, is down from its 52-week high of 45 hit in early July. Navellier says it's way undervalued, considering Crossmann's strong earnings growth and low price-earnings ratio. Based on the consensus Thomson Financial/First Call earnings estimate of $4.93 a share for 2001, the stock is trading at a depressed p-e of 4.8. And based on 2002's estimated earnings of $5.62, the stock trades at a 4.2 multiple. Last year, Crossmann earned $3.28, fully diluted.
The key in this market is earnings, says Navellier, who expects many companies will continue to post poor results. Crossmann is a pillar in that sense, "and I'm not worried at all," he says. The Northeast is feeling numb right now in terms of homebuilding because of the attack, he says. But in the regions where it operates, Crossmann is standing strong, he says.
By Gene G. Marcial