Bargain-Hunters' Faves

With the growth Kahn sees on the horizon for Hologic, he doesn't believe the company will sell out until it's doing about $600 million a year in sales, or double the current rate. If that happens, which seems entirely plausible, the stock, now around $35, should go out for about $75 to $100 a share.

"The conversion to digital mammography is in the second inning of a nine-inning game," said Kahn, a longtime Yankees fan. He likes Chief Executive Jack Cumming a lot and notes that with rock-solid earnings ahead, no debt and a falling valuation, the company should be at the top of both growth and value investors' buy lists in a broad market decline.

More briefly, Kahn likes Audiovox because it holds $8 of its $12.25-a-share value in cash, has no debt and has several new sales programs in place over the next year that should boost the company back to profitability. He notes that Audiovox will be the leading importer and distributor of XM Satellite Radio(XMSR Quote) sets next year and also has a compelling new line of hi-fi equipment that fits the new digital lifestyle of MP3 players and home theater.

He likes IDT because it has $11.50 of its $12.70 a share in cash, is also debt-free and has been making strides toward profitability by reducing head count and finding ways to monetize its valuable wireless spectrum. Indeed, he says the spectrum alone, if the right deal is done, should boost the stock by at least $8 a share.

Kahn is willing to wait a long, long time for his views to take shape. But since he's got a deep portfolio of names like this, it seems that something is almost always perking up on different cycles. His firm's average $1 million account is up 16.4% a year since 1994, vs. 11.4% for the broad market. At that rate of compounding, your money doubles every four years before taxes. It's a great result for a manager with no real growth stocks.