Housing Stocks: Hedge Funds Think These Homebuilders Will Rebound

By
A A A

(Article by Becca Lipman, list compiled by Eben Esterhuizen, CFA. Data sourced from Fidelity.)

US homebuilder sentiment hit a three-month low for September with a reading of 14, down from 15 in August in a continuation of a 6-month streak of dismal readings below 20.

Keep in mind that on the NAHB/Wells Fargo Housing Market index, 50 and above is when builders begin to feel market conditions are favorable.

Clearly, things haven't progressed well for the housing industry, which has been suffering from challenges posed by competition with foreclosured houses and increased material goods costs.

Builders also face difficulties in obtaining accurate appraisal values for new homes competing with re-sale homes, buyers who are unable to obtain credit, loans or meet higher down payment requirements, and "some would-buyers who want to purchase a new home [but] can’t sell their old one," according to the Washington Post.

It seems even more tough times ahead for the homebuilding industry. David Crow, chief economist to The National Association of Home Builders, says "the broader picture remains fairly bleak due to the weak economy and job market." Furthermore, Bloomberg reports the gauge of sales expectations for the next six months dropped to 17 this month from 19.

So, we were wondering, are any housing stocks expected to recover any time soon? To investigate, we collected data on institutional money flows, and identified a list of homebuilder stocks that have seen significant institutional buying during the current quarter.

Big money managers seem to think the industry's weakness presents an attractive buying opportunity in the stocks mentioned below--do you agree?

Analyze These Ideas (Tools Will Open In A New Window)

1. Access a thorough description of all companies mentioned
2. Compare analyst ratings for all stocks mentioned below
3. Visualize annual returns for all stocks mentioned

List sorted by market cap.

1. PulteGroup, Inc. (PHM): Engages in homebuilding and financial services businesses primarily in the United States. Net institutional purchases in the current quarter at 14.9M shares, which represents about 4.43% of the company's float of 336.17M shares.

2. KB Home (KBH): Operates as a homebuilding and financial services company in the United States. Net institutional purchases in the current quarter at 5.5M shares, which represents about 8.42% of the company's float of 65.35M shares.

3. Standard Pacific Corp. (SPF): Operates as a diversified builder of single-family attached and detached homes in the United States. Net institutional purchases in the current quarter at 4.7M shares, which represents about 4.47% of the company's float of 105.24M shares.

4. The Sherwin-Williams Company (SHW): Engages in the development, manufacture, distribution, and sale of paints, coatings, and related products primarily in North and South America, the Caribbean region, Europe, and Asia. Net institutional purchases in the current quarter at 4.7M shares, which represents about 5.35% of the company's float of 87.93M shares.

5. Owens Corning (OC): Provides composite and building materials systems worldwide. Net institutional purchases in the current quarter at 9.0M shares, which represents about 8.48% of the company's float of 106.09M shares.

6. Trex Co. Inc. (TREX): Distributes wood/plastic composite products primarily for residential and commercial decking and railing applications in the United States. Net institutional purchases in the current quarter at 631.4K shares, which represents about 4.89% of the company's float of 12.92M shares.

7. United States Lime & Minerals, Inc. (USLM): Engages in the manufacture and sale of lime and limestone products in the United States. Net institutional purchases in the current quarter at 157.6K shares, which represents about 6.76% of the company's float of 2.33M shares.

8. UDR, Inc. (UDR): Operates as a self-administered equity real estate investment trust (REIT). Net institutional purchases in the current quarter at 14.7M shares, which represents about 6.84% of the company's float of 214.97M shares.

9. American Capital Agency Corp. (AGNC): Operates as a real estate investment trust (REIT). Net institutional purchases in the current quarter at 25.2M shares, which represents about 14.12% of the company's float of 178.45M shares.

10. Senior Housing Properties Trust (SNH): Senior Housing Properties Trust, a real estate investment trust (REIT), primarily invests in senior housing properties in the United States. Net institutional purchases in the current quarter at 17.9M shares, which represents about 11.7% of the company's float of 152.96M shares.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks


Kapitall

Kapitall

More from Kapitall:

Related Videos

Stocks

Referenced

Most Active by Volume

33,064,628
  • $99.69 ▼ 1.91%
31,156,109
  • $16.735 ▼ 0.03%
29,513,338
  • $42.4601 ▼ 0.21%
28,558,746
  • $13.735 ▲ 29.70%
23,520,406
  • $17.86 ▲ 7.98%
18,339,270
  • $75.0255 ▲ 0.60%
14,802,322
  • $6.694 ▼ 3.54%
14,188,656
  • $98.71 ▲ 0.19%
As of 9/16/2014, 11:33 AM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com