Toll's Outlook Raises Hopes for the Sector

Robert Toll of Toll Brothers (TOL - commentary - Cramer's Take) offers a glimmer of hope in some otherwise tough markets, and I can't be more enthused, given what a monster bear he is. He also has suggested a housing tax credit, which would help clean up inventory.

One of the extraordinary points that Toll said was that he believes Naples, Fla., has turned around. That's something. Other than the Inland Empire, I have regarded the west coast of Florida as the biggest wasteland out there.

To hear anything good about Florida beyond the occasional pockets of Orlando that people like from time to time says there's something better happening -- not that we haven't seen moments where what was good quickly slipped back to bad.

If you think that Toll is right, the one to buy is Ryland (RYL - commentary - Cramer's Take), which was the most far-ahead and forward-thinking of all the homebuilders. The stock has rallied huge, so I can't push it that hard, but it is the one that makes the most sense, and I would urge you to wait on a decline before pulling the trigger.

Here's what I would do before I got comfortable with this one: Read both conference calls. Toll's been a realist, so have the Ryland people. Something's getting better here -- not fast, and not "bottoming," but the rate of decline is getting less steep.

"U" bottom. "U" bottom.

At the time of publication, Cramer had no positions in the stocks mentioned.

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