1. Green Brick Partners, Inc. (NYSE:GRBK)
Greenlight Capital’s Stake Value: $534.81 million
Number of Hedge Fund Holders: 25
Green Brick Partners, Inc. (NYSE:GRBK) operates as a homebuilding and land development company. The company is optimistic about the housing market over the long term, which is supported by demographic tailwinds and persistent housing shortages. The company’s Q4 2024 net new orders rose 29.3% YoY to 878 homes. Its growth engine, Trophy Signature Homes, represented the lion’s share of total sales orders at 53.6% of homes sold. Green Brick Partners, Inc. (NYSE:GRBK) has attributed its achievements to its footprint in desirable infill and infill-adjacent submarkets where the company generated more than 80% of its full-year revenues.
The company kicked off 2025 with a healthy position for growth, with total lots owned and controlled up 31.9% YoY. At 2024 end, Green Brick Partners, Inc. (NYSE:GRBK) had 106 active selling communities, representing a 16.5% YoY growth. The company expects that the entry of millennials and Gen Z into their prime home-buying years will continue to drive significant demand. Green Brick Partners, Inc. (NYSE:GRBK) remains well-placed to further capitalize on the incremental demand, leveraging its superior land positions, mainly via its Trophy brand which specializes in more affordable housing options catering to the largest segment of the potential homebuyer market.
Greenlight Capital, an investment management firm, released its Q3 2024 investor letter. Here is what the fund said:
“In addition to gold, Green Brick Partners, Inc. (NYSE:GRBK) was the other significant winner during the quarter. GRBK reported quarterly earnings of $2.32 per share, which beat analyst estimates of $1.77 per share. The company continues to lead the industry in gross margins and has distinguished itself from its peers, who are increasingly focused on appearing to be “land light.” GRBK believes that being land light is very expensive at the gross margin level. Rather than pay high rates to third-party off-balance sheet land bankers, GRBK owns most of its land and lots while maintaining a very low-leveraged investment-grade balance sheet. As a result, it earns all of the development profits in addition to the homebuilding profits. Despite being “land heavy,” the result is a return on equity that is near the top of the industry. Even more exciting, GRBK has had a very successful period of land acquisition, and as a result the prospects for it to continue delivering industry-leading margins remain promising. This quarter, GRBK shares advanced from $57.24 to $83.52.”
While we acknowledge the potential of GRBK as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than GRBK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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