In this article, we discuss the 5 best housing stocks of 2021. If you want to read our detailed analysis of the housing industry, go directly to the 11 Best Housing Stocks of 2021.
5. AvalonBay Communities, Inc. (NYSE: AVB)
Number of Hedge Fund Holders: 40
AvalonBay Communities, Inc. (NYSE:AVB) is a real estate investment trust (REIT) and the 3rd largest apartment owner in the United States. It is ranked fifth on our list of the 11 best housing stocks of 2021. The stock has returned over 50.68% to investors over the course of the past year.
On July 28, AvalonBay Communities, Inc. (NYSE:AVB) posted earnings for the second quarter of 2021, reporting earnings per share of $1.98, beating estimates by $0.04. The revenue over the period was around $561 million, down 2.53% year-over-year.
At the end of the first quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $631 million in AvalonBay Communities, Inc. (NYSE:AVB), up from 32 the preceding quarter worth $864 million. Out of the hedge funds being tracked by Insider Monkey, AEW Capital Management has the most valuable stake in AvalonBay Communities, Inc. (NYSE:AVB) as of the end of the first quarter of 2021, worth close to $104 million, comprising 3.62% of its total 13F portfolio.
On August 2, BTIG reiterated its Buy rating on AvalonBay Communities, Inc. (NYSE:AVB) while raising its price target to $285 from $251, noting that REIT valuations will benefit from strong trends in net operating income and will continue to have strong EPS.
4. PulteGroup, Inc. (NYSE: PHM)
Number of Hedge Fund Holders: 42
PulteGroup, Inc. (NYSE:PHM) is the third largest homebuilder company in the U.S., operating in 44 housing markets across 23 states. It is ranked fourth on our list of the 11 best housing stocks of 2021. The stock has returned over 25.07% to investors over the course of the past year.
On July 27, PulteGroup, Inc. (NYSE:PHM) posted earnings for the second quarter of 2021, reporting earnings per share of $1.72, missing estimates by $0.01. The revenue over the period was around $3.36 billion, up 29.52% year-over-year.
At the end of the first quarter of 2021, 42 hedge funds in the database of Insider Monkey held stakes worth $1.05 billion in PulteGroup, Inc. (NYSE:PHM), up from 40 the preceding quarter worth $1 billion. Out of the hedge funds being tracked by Insider Monkey, billionaire Ken Griffin’s Citadel Investment Group has increased its stake in PulteGroup, Inc. (NYSE:PHM) in the first quarter of 2021, by 221% to around $176 million, comprising 16.07% of its total 13F portfolio. This stake is the most valuable position in PulteGroup, Inc. (NYSE:PHM) as of the end of the first quarter of 2021.
On July 28, BTIG reiterated a Buy rating on PulteGroup, Inc. (NYSE:PHM) while boosting its price target to $77 from $72. BTIG noted its strong margins as well as the 28% growth of its net new orders in the second quarter of 2021. BTIG also noted the continuation of the strong demand.
3. The Home Depot, Inc. (NYSE: HD)
Number of Hedge Fund Holders: 68
The Home Depot, Inc. (NYSE:HD) is the largest home improvement retail company. It is ranked third on our list of the 11 best housing stocks of 2021. The stock has returned over 23.24% to investors over the course of the past year.
On May 18, The Home Depot, Inc. (NYSE:HD) posted earnings for the first quarter of 2021, reporting earnings per share of $3.86, beating estimates by $0.81. The revenue over the period was around $37.50 billion, up 32.70% year-over-year.
At the end of the first quarter of 2021, 68 hedge funds in the database of Insider Monkey held stakes worth $4.36 billion in The Home Depot, Inc. (NYSE:HD). Out of the hedge funds being tracked by Insider Monkey, billionaire Ken Fisher’s Fisher Asset Management has the most valuable stake in The Home Depot, Inc. (NYSE:HD) as of the end of the first quarter of 2021 to around $2.15 billion, comprising 1.51% of its total 13F portfolio.
Ken Fisher’s Fisher Asset Management increased its stake in The Home Depot, Inc. (NYSE:HD) by 3% in the first quarter of 2021, and by 4% to $2.33 billion in the second quarter of 2021.
Ensemble Capital, an investment management firm, mentioned The Home Depot, Inc. (NYSE:HD) in its Q1 2021 investor letter. Here is what Ensemble Capital had to say:
“Notable contributors to the Fund’s returns this quarter (included) Home Depot. Home Depot (8.9% weight in the Fund) continued to benefit from a red-hot housing and home improvement market, delivering record financial performance in 2020. As a high return on invested capital business, any step-up in growth results in considerable shareholder value creation. While 2021 comparable sales may not yield impressive headline results, we believe there are several secular tailwinds supporting continued housing investment, including millennials entering prime household formation/peak earnings years, relatively low interest rates, and government policies.
Home Depot (8.9% weight in the Fund): The big orange sign of Home Depot is a familiar sight for homeowners across the country. Despite the rise of Amazon, Home Depot has generated outstanding results for shareholders during the rise of eCommerce, even as Home Depot’s end market in housing suffered the worst collapse in a century. Over the last fifteen years, a period which began at the peak of the housing bubble, Home Depot’s stock has generated annual returns of 17% a year, outperforming the S&P 500 by approximately 7% a year. (Click here to see the full text)
2. Lennar Corporation (NYSE: LEN)
Number of Hedge Fund Holders: 49
Lennar Corporation (NYSE:LEN) is one of the largest homebuilder companies in the U.S., operating in 21 states. It is ranked second on our list of the 11 best housing stocks of 2021. The stock has returned over 45.48% to investors over the course of the past year.
On June 16, Lennar Corporation (NYSE:LEN) posted earnings for the second quarter of 2021, reporting earnings per share of $2.95, beating estimates by $0.57. The revenue over the period was around $6.43 billion, up 21.62% year-over-year.
At the end of the first quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $1.57 billion in Lennar Corporation (NYSE:LEN). Out of the hedge funds being tracked by Insider Monkey, Greenhaven Associates has the most valuable stake in Lennar Corporation (NYSE:LEN) as of the end of the first quarter of 2021, worth close to $711 million, comprising 16.07% of its total 13F portfolio.
On June 21, Argus gave Lennar Corporation (NYSE:LEN) a $115 price target while reiterating its Buy rating. Argus argued that its marketing focus on affordable regions in Florida and Texas distinguishes Lennar Corporation (NYSE:LEN) from its competitors.
1. D.R. Horton, Inc. (NYSE: DHI)
Number of Hedge Fund Holders: 50
D.R. Horton, Inc. (NYSE:DHI) is one of the largest homebuilder companies in the U.S., operating in over 90 housing markets across 29 states. It is ranked first on our list of the 11 best housing stocks of 2021. The stock has returned over 44.48% to investors over the course of the past year.
On July 22, D.R. Horton, Inc. (NYSE:DHI) posted earnings for the second quarter of 2021, reporting earnings per share of $3.14, beating estimates by $0.33. The revenue over the period was around $7.28 billion, up 35.15% year-over-year.
At the end of the first quarter of 2021, 50 hedge funds in the database of Insider Monkey held stakes worth $2.17 billion in D.R. Horton, Inc. (NYSE:DHI). Out of the hedge funds being tracked by Insider Monkey, Egerton Capital Limited has the most valuable stake in D.R. Horton, Inc. (NYSE:DHI) as of the end of the first quarter of 2021, worth close to $915 million, comprising 4.81% of its total 13F portfolio.
On July 26, Wedbush raised its rating on D.R. Horton, Inc. (NYSE:DHI) to Outperform from Neutral while raising its price target to $125 from $94, noting that the low rates for 30-year mortgages will benefit the consumer base of D.R. Horton, Inc. (NYSE:DHI) and consequently the company itself.
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