From this week's Valueline report, stocks with the lowest current year PE's:

Company-----Current PE----Industry

*XL Capital Ltd. 2.9 Insurance (Prop/Cas.)
*Aircastle Ltd. 3.5 Financial Svcs. (Div.)
***Lear Corp. 4.0 Auto Parts
*Max Capital Group 4.2 Reinsurance
***LCA-Vision 4.5 5 3 Medical Supplies
**Crocs, Inc. 4.7 Shoe
***OM Group 4.7 Chemical (Specialty)
*Amer. Int’l Group 4.8 Financial Svcs. (Div.)
**Cal-Maine Foods 4.9 Food Processing
*Fifth Third Bancorp 5.0 Bank (Midwest)
*Allied Capital Corp. 5.1 Financial Svcs. (Div.)
*Capital Trust 5.2 Financial Svcs. (Div.)
*Huntington Bancshs. 5.2 Bank (Midwest)
***Oshkosh Corp. 5.2 Auto & Truck
**Pantry (The), Inc. 5.3 Retail (Special Lines)
*Regions Financial 5.3 Bank
*RenaissanceRe Hldgs. 5.3 Reinsurance
***Sonic Automotive 5.3 Retail Automotive
***Avis Budget Group 5.4 Industrial Services
**Gannett Co. 5.4 Newspaper
**Westwood One 5.6 Entertainment

Morgan Stanley 5.9 Securities Brokerage
Deluxe Corp. 6.1 Publishing
EarthLink, Inc. 6.1 Internet
Group 1 Automotive 6.1 Retail Automotive
Annaly Capital Mgmt. 6.2 R.E.I.T.
Everest Re Group Ltd. 6.2 Reinsurance
Pacific Cap. Bancorp 6.3 Bank
Sigma Designs 6.3 Entertainment Tech
Tenneco Inc. 6.4 Auto Parts
Hartford Fin’l Svcs. 6.6 Financial Svcs. (Div.)

Park-Ohio 6.6 Diversified Co.

Baumie note: but this was when PKOH's stock price was 14.76. Taking it down to the current 13/sh, and assuming 2.25 in 08 EPS (per VL), the current PE is closer to 5.8, so eliminate all co's with PE's north of 5.8, leaving the first full paragraph to consider.

Next, throw out the (re)insurance, banks and financial svc companies, as who can trust their earnings or book value this year anyway (marked *). Then, throw out the oddballs (marked **): Cal-Maine Foods (eggs), although they got at good report in Barrons, Crocs (BS shoe fad), The Pantry (convenience store), Gannett and Westwood -- different biz.

That leaves the following worthy of consideration (marked ***): Lear (auto parts), Sonic Auto (retail auto), Avis (auto rentals) and Oshkosh (auto and truck), but isn't PKOH exposed to these auto/truck biz anyway, LCA Vision (laser for eyes) -- too weird, OM Group (chemical) -- but isn't Dow Chem getting hammered with price increases, leaving PKOH as the sole standout in the diversified category. Morgan Joseph was right to raise rating to buy today.

Look for price to continue to recover and 2H 08 to be strong.

Baumie

PS Welcome aboard Mr. Rutherford -- great time to join global company with growing businesses in industrial heartland. Solid mgt team going forward.

Mr. C: "We'll kill 'em with earnings"