NEW YORK (Reuters) - Shares of luxury retailers may have rebounded too strongly from lows hit last March, hedge fund manager Shawn Kravetz said on Tuesday 8 December, saying he is taking a wait-and-see approach to see if they fall back to attractive investment levels.

Though sales at upscale retailers such as Saks Inc (SKS.N) and Tiffany & Co (TIF.N) seem to be stabilizing and cost-cutting has allowed a number of retailers to eke out profits, Kravetz, president of Esplanade Capital, said at the Reuters Investment Outlook Summit in New York that the sector's share-price recovery may be deceiving.

The Dow Jones Luxury index .DJLUX has nearly doubled since March, though it is still down about 26.5 percent from two years ago.

"Can you seriously tell me that you think their business is only 20 percent worse today than it was when every Wall Street person in the world could have easily walked into a Tiffany with impunity and bought a wonderful gift for the holiday? When they could expand and put 18 stores in Dubai if they wanted to," Kravetz said.

He credited the retailers with coping well with the crisis, but for now Esplanade is taking a neutral stance toward luxury retailers, or even some of their downmarket brethren such as Target Inc (TGT.N).

"Everyone knows they're in pain," Kravetz said. "They've done a really good job in general of managing costs, managing inventory, liquidity, and scaling back as appropriate."

"Maybe in the next 12 months we'll have the chance to own a Coach, (COH.N) to own Tiffany, to own Target again," he said, noting that those stocks were once cheap and now they're not.

"It's a complex waiting game," he said.