Investment strategist Steven Kroll plays the market with aplomb--and prudence: He buys shares only in fast-growth companies--with yearly earnings rises of 20% to 25%--that are cheap, trading at book value or less. They must also be buyout targets in consolidating industries. And Kroll seeks U.S. plays: no Asian or emerging-market exposure.

Where to find such stocks? Kroll, a managing director at Monness, Crespi, Hardt, a Wall Street research boutique that caters to large institutions, is snapping up specialty homebuilders, where ''consolidation is just picking up,'' he says. Kroll's top choices: Standard Pacific (SPF), Del Webb (WBB), and Ryland Group (RYL).

He thinks large-caps--the Cokes and Gillettes--are still overpriced. Kroll was a champion of such blue chips at J.P. Morgan, where he was a portfolio manager for 11 years, before forming Hutton Asset Management in 1981. Hutton's assets had ballooned from zero to $38 billion by the time he left in 1991 to join Monness. Kroll thinks the best values now are to be found in small- to mid-cap stocks.

Standard Pacific, a builder of upmarket houses in California and Texas, trades at 9 3/8 a share--way below its estimated book value of $12.40. On Oct. 26, Standard reported that its third-quarter earnings jumped 68%, to $11 million, or 38 cents a share. Kroll expects Standard to earn $1.40 a share in 1998 and $1.80 in 1999, compared with last year's 81 cents. He thinks the stock's long-term worth is 25.

Del Webb, which develops residential communities in Sunbelt states such as Arizona, Florida, and Nevada, trades at 22--equal to its book value. For the quarter ended Sept. 30, earnings jumped 35%. Analysts expect Del Webb to earn $2.58 in fiscal 1999 ended June 30, up from fiscal 1998's $1.96. Kroll sees the stock, now at 22, hitting 40 in a year.