Barron's Summary

Barron's cover discusses housing mkt, saying that the broad selloff in housing shares may have created bargains among builders, home-improvement retailers and others. many home builders now trade around book value, and some, like MDC Holdings (MDC), Hovnanian Enterprises (HOV) and WCI Communities (WCI), languish at a discount to book value. Book value generally has acted as a floor for the stocks, and have given investors a buying opportunity. Countrywide Financial (CFC) has come under pressure lately. Countrywide looks tempting b/c it now trades for just 7x projected '06 profits of $4.40 and for 1.4x BV, giving it the lowest valuation among major financial stocks. The co has long been mentioned as a takeover tgt. In a letter to fund shareholders last month, Legg Mason's Bill Miller admitted he was "wrong" and early on the group, but said he's sticking with such stocks as Centex (CTX) and Pulte (PHM) "b/c we think the bottom is near or within squinting distance." Stephen Kim, of Citigroup, notes that many investors view the home-building stocks as "dead money" b/c the housing mkt may not stabilize for another year or 2. He favors Lennar (LEN), KB Homes (KBH) and Toll (TOL), but notes that investors tend not to differentiate much in both bull and bear mkts. According to the article, Levitt (LEV) is an intriguing, low-profile Florida builder whose shares now trade for around 11, just 63% of its BV of $17.50 a share. "This co takes orange groves and turns them into small towns," says Alan Fournier, of Pennant Capital. Other stocks mentioned include: BDK, MAS, SHW, LOW, HD, MHK, WHR, ETH, FBN and H.

Fund manager likes HOT, HLT and BEE.

Barron's suggests that investors sitting on profits in surging broker stocks might want to lighten up b/c the bullish operating cycle for these Wall St. firms has about run its course. Article mentions Bear Sterns (BSC), Goldman Sachs (GS), Lehman Brothers (LEH), Morgan Stanley (MS), Merrill Lynch (MER) Citigroup (C) and JP Morgan (JPM).

Dell's (DELL) plans for boosting customer service are a clear step in the right direction. But it still faces daunting challenges, both in the US and overseas.

Barron's discusses Anadigics (ANAD), whose stock is down some 40% this year amid a general slump in telecom. Article suggests that the shares could more than double as the co's financial performance continues to improve.

An activist investor, James Mitarotonda's Barington Companies Equity Group, will keep the pressure on Warnaco (WRNC) to perform. It needs it. The shares jumped recently and should go further as James Mitarotonda dives in.

"The Trader" column discusses CBS (CBS), which shares are up 14% since the co announced hirin Katie Couric as news anchor. According to the article, the more solid reason to give CBS shares a look is that it represents one of the most undervalued cash-flow streams from radio, TV stations and billboard advertising available. And, even better, mgmt is doing what it can to realize some of that value and share it with stockholders. CBS trades for less than 9x its EV to cash flow. Comparable co's to each individual CBS segment routinely fetch substantially higher multiples. CBS, in fact, has been divesting radio stations, and recently sold 15 of them in 4 mkts for 14x trailing EBITDA. CSFB analyst William Drewry says he expects CBS will continue to sell radio stations, perhaps another 25. He figures the co will return the cash to shareholders via a buyback. There is "an arbitrage opportunity inherent in CBS shares," writes Drewry, given the gap between its own multiple and the valuations the co is realizing from asset sales. Of course, CBS isn't about to liquidate the co and tap all this implied value. But the disparity is evidence that there's a floor to the stock's valuation and ample room for multiple expansion over time. Adding it together, a value for CBS in the low- to mid-30s doesn't seem all that challenging. With its 2.3% dividend yield, the possible return gets that much more interesting.

"Follow Up" section discusses SonoSite (SONO) saying that sometimes investors are too quick to walk out on a co after it misses Wall Street's expectations. Take SonoSite, the leading producer of hand-carried ultrasound medical-imaging equipment. Its shares have plunged more than 20% following a narrow miss on the Street's JunQ ests. It doesn't take a high-tech diagnostic tool to find a buying opportunity in these shares. SonoSite's devices remain compelling, they're cheaper and just as powerful as some ultrasound machines the size of dishwashers, and the co is bolstering its distribution efforts. Jan D. Wald, who follows SonoSite for AG Edwards, figures the stock can jump by more than 45% in the next 12 months, to 44.

"Plugged In" column discusses Comcast (CMCSA) and its involvement in airwave auction. It's a Fridays Barron's Online article. Read here.