Buckingham: At Home with Toll

01/10/2003 12:00 am EST

Focus:

John Buckingham

Editor, The Prudent Speculator

The Prudent Speculator has been rated by the Hulbert Financial Digest as the #1 performing investment newsletter for total return performance for the past ten and 20 years. Editor John Buckingham searches for inherent value. He turns to luxury homebuilder Toll Brothers as his favorite stock for 2003.

"While we always advocate broad diversification, our top selection for 2003 is Toll Brothers (TOL NYSE), the nation's leading builder of luxury homes. Toll builds single-family and attached home communities and master-planned golf course communities. Toll is the only national home building company focused primarily on the luxury market, and based on trends that show Americans wanting larger and more highly-amenitized homes, we believe that demand for luxury homes will increase.

"The numbers support this assertion. The company recently reported its 10th consecutive year of record earnings, 11th consecutive year of record revenues, 12th consecutive year of record contracts, and its highest year-end backlog ever. Despite having the characteristics of some of the hottest growth stocks, TOL trades for just seven times trailing-12-month earnings and 1.3 times book value. Perhaps more importantly, handsome earnings growth is forecast for at least through 2004. Our long-term price target is $43."

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