5. United Homes Group Inc. (NASDAQ:UHG)
Number of Hedge Fund Holders: 14
United Homes Group Inc. (NASDAQ:UHG) is a homebuilding company that designs, builds, and sells homes in South Carolina, North Carolina, and Georgia. The company’s residential offerings include entry-level attached and detached homes, first-time move-up homes, and second move-up detached homes, catering to a diverse clientele. In January 2024, UHG expanded its operations by acquiring the homebuilding business and assets of Creekside Custom Homes, LLC, a home builder and land developer in South Carolina. This acquisition aligns with the company’s growth strategy and enhances its presence in the Southeast region. UHG ranks fifth on our list of the best penny stocks with insider buying.
United Homes Group Inc. (NASDAQ:UHG) is positioned as a builder of high quality, affordable houses with a focus on efficient, streamlined processes aimed at decreasing cycle times while improving inventory turnover rates and margins. The company demonstrated strong performance in the latest Q3 2024 with a 25% YoY increase in sales, 30% increase in total closings, and 35% increase in revenue. UHG maintains a strong lot position of approximately 8,600 lots, with ~99% of lots optioned, representing the highest percentage among its peer group.
United Homes Group Inc. (NASDAQ:UHG) operates with a land-light model, where lots are delivered “just in time,” enabling higher ROE. Since going public in 2023, UHG has completed three builder acquisitions, focusing on attaining scale through strategic acquisitions in high growth markets with strong lot pipelines and local market expertise. The company recently completed a refinancing transaction that reduced interest expense by ~320 bps, saving approximately $3.7 million annually, while also reducing leverage by $10.0 million from $80.0 million to $70.0 million. The potential arising from the aforementioned achievements is reinforced by strong insider purchasing in the last six months.
