I think that home builders have a good chance of making another set of new highs, or at least a major double top. The reason is quite simple, their PE are quite reasonable relative to the market, and peak earnings is probably another two quarters if not more away. Interest rates are still low and may stay that way for some time, their inventories are low thus they are not under pressure to yield on prices. I don't follow the segment close enough to make any specific rec on which are best (their balance sheets are somewhat more complex than your standard outfits because of possible manipulation of inventory figures <g>).
Zeev
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