Q: If Terex can come close to hitting DeFeo's goal, where could the stock trade? A: Marcin: It traded in the mid 90s last summer and got as low as 50 earlier this year. We think it could hit $100 a share. Why? If Terex can make $7.50 in 2008 and $9 in 2009, it would only take a price/earnings ratio of 12 to get you to 100. Comparable companies like Caterpillar [CAT] and Joy Global [JOYG] already are trading for 14 to 20 times earnings.

Q: What about the stock, which is now around 55? A: Marcin: The Wall Street consensus is for $4.50 in earnings this year and a little over $5 next year. We think Cummins can do even better because it has the opportunity to increase its operating margins, now at 8% to 9%, by a couple percentage points over the next few years. We think Cummins can make closer to $5 in earnings this year and perhaps as much as $6 in 2009. Many machinery stocks trade for 13 to 15 times earnings. Put a 14 multiple on $6 in earnings and the stock could get close to 85 next year.

Q; How much higher could Conoco go? A: Marcin: If commodity prices hold these levels and Conoco continues to aggressively repurchase shares, it could make $14 next year. If the stock were to trade at nine to 10 times earnings, that could be $120 to $140 a share. If the energy complex rolls over, we have a fair margin of error given the low valuation.

Q: The stock is around $37. A: Marcin: Nabors is expected to earn $3.15 this year and nearly $4 next year. Those estimates could be conservative for one simple reason: Every energy exploration and production company in the U.S. has a new play, whether it be in Pennsylvania or Wyoming. The combination of drilling technology improvements and high gas prices is going to lead to a significant increase in drilling over the next two to three years. Nabors gave an interesting presentation recently in which it outlined a scenario whereby the company could potentially earn $6 a share in profits in 2010 or 11. If Nabors earns between $5 and $6 in a few years, the stock should get to $60.

Q: The stock's around 30? A: Marcin: It's expected to make about $4 a share in both the fiscal year that ends in June and the June 2009 year. We think Western Digital can make between $4.50 and $5 in fiscal 2009. Hard-drive stocks never get a high valuation, but if the company gets an 11 P/E on $4.50 a share in earnings, it could approach $50 share. A company that produces revenue growth of 20% a year, generates a lot of free cash and operates in a very appealing part of the technology business ought to be able to get a 10 to 12 P/E ratio.

Q: Talk about Skechers. A: Epstein: Skechers. It's one of the biggest footwear companies in the country. It specializes in knockoffs. Let's call them fast trend followers. The nice thing is that if there is a trade-down effect, which Wal-Mart is benefiting from, Skechers ought to participate. Skechers shoes are getting more shelf space at leading retailers because they make good-quality shoes for a value price. Their shoes cost $20 to $50 a pair. Skechers also has a fast-growing international business that accounted for 27% of revenues last quarter and is growing over 40%. The stock is around 21, which is about 10 times estimated 2008 earnings of $2 a share. The company also has $6 a share in net cash. If the stock gets a P/E of 14, it could trade into the high 20s.

Q: Would that rule out a stock like Pfizer, which trades at just eight times earnings? A: Marcin: We don't own Pfizer. It's not growing.