"We recently shorted carpet maker Mohawk Industries (MHK). We were short Mohawk last year at approximately the same levels. We recommended selling Mohawk in March 2006 at $87 and we closed the position in June 2006 at $70 for a 20% gain." Mohawk is highly dependent on the new residential construction market and the remodeling market. It is in the sweet spot of where you would expect there might be problems...We think Mohawk will have down earnings in 2007. Earnings will go from the 2006 level of $6.57 a share to $5.94 a share...We see it heading to $68."

"We are recommending a short sale on Fossil (FOSL)...The bigger story is that the Fossil brand has become more and more irrelevant. The fashion watch segment has gotten very crowded and sales in Fossil's price range have been in decline...Our forecast is about $1.30 a share this year and the Street estimate is about $1.45 a share. Another interesting item is the company has about 103 days of inventory on hand. That's a lot and it would appear they are going to have to take markdowns...We have an $18 price target. "

"Any other new short ideas?" "Healthways (HWAY), the nation's largest disease-management company. They use health insurance-claim data to identify people with high-cost chronic diseases...There has been very spotty scientific evidence that disease management is successful and that it is saving anybody any money...The stock is expensive at 45. This has a fiscal-year ending August and the Street is at $1.50 a share in earnings this year and at $2.04 for fiscal 2008. Our projection is $1.39 a share for '07 and $1.64 for '08 and our price target is 33."

"Our ratio of short sales to long ideas is about 3 to 1, but we like to do long ideas. We published a report on SAIC (SAI) in January. SAIC is the largest pure-play federal information technology services company... It also has about $600 million worth of real estate on the books. It has a $14 billion backlog. We think they'll earn about $1.02 a share for this year and about $1.30 in free cash flow...Our price target is in the mid-20s."

"Republic Airways (RJET). What's interesting is that it has a completely different business model from other airlines. Republic Airways is not subject to the same variability in profit...The company has been profitable for 31 out of its 33-year history...The company signs long-term 10-to-15 year fixed-fee contracts that make its earnings more predictable...It is very, very inexpensive. We think they'll earn $1.79 this year, $1.97 for next and $2.38 the year after. The stock is trading at about $19 a share, about 10 times earnings. We have a target in the mid-20s."