Looking Fierce at Griffon

Recently, shares of Griffon (GFF ) sprang up sharply, completing a V-shaped valley--after plunging from 11.20 on Sept. 10 to 9.92 on Sept. 17, the day trading resumed after the attacks. Two weeks later, the stock rallied to 12.20. Griffon makes building products and specialty plastic films. But what made its stock rebound so promptly was its third and smallest unit, which makes communications and radar systems for key defense programs, including the SH60R multisystem helicopter, and the Airborne Warning & Control system--and for the U.S. Air Force C-17 cargo planes that were used to drop foodstuffs to Afghanistan refugees. One money manager who has been buying shares says that, based on comparison with its industry peers, Griffon's defense operation alone is worth the current price of the stock, now at 11.05. He says the two other businesses are worth just as much, so he values Griffon at 20 a share. Analyst Laurence Baker of Legg Mason Wood Walker, who rates the stock a buy, expects Gifford to earn 82 cents a share in 2001 and 1.05 in 2002, vs. 2000's 75 cents.

By Gene G. Marcial

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