5 Construction Stocks Billionaires Are Loading Up On

1. Lennar Corporation (NYSE:LEN)

Number of Billionaire Investors: 14

Dollar Value of Billionaire Holdings: $245,357,062

Number of Hedge Fund Holders: 51

Lennar Corporation (NYSE:LEN) is a Miami, Florida-based home construction and real estate development company that is considered one of the biggest residential construction companies in the US. The company operates in multiple states and is involved in various aspects of the homebuilding industry.

On May 24, Matthew Bouley at Barclays increased the target price for Lennar Corporation (NYSE:LEN) stock from $120 to $135 and maintained an Overweight rating. The analyst believes that Lennar Corporation (NYSE:LEN) has favourable growth prospects due to the depressed inventory of residential properties.

Here’s what Baron Funds said about Lennar Corporation (NYSE:LEN) in its Q4 2022 investor letter:

“In the fourth quarter of 2022, we increased the Fund’s exposure to residential-related companies by acquiring shares in two best-in-class homebuilders (Toll Brothers, Inc. and Lennar Corporation (NYSE:LEN)) and two best-in-class building products companies (Floor & Decor Holdings, Inc. and The Sherwin-Williams Company).

Lennar Corporation is the second-largest U.S. homebuilder with competitive scale advantages (including materials procurement and labor), an increasingly capital-light business model, a strong balance sheet, a strategic and forward-looking focus on technology investments, and an exceptional management team.

At its recent price, Lennar’s shares were valued at only 1.2 times our estimate of 2023 tangible book value of $77 – a large discount to its historical valuation range of 1.5 to 2.5 times tangible book value.

Despite the company’s strong and liquid balance sheet and a business strategy that generates tremendous cash flow, Lennar’s shares are valued at only 5 to 6 times cash flow versus a homebuilder such as NVR, Inc. which is valued at 15 times cash flow.”

Disclosure: None. You can also take a look at the 15 Most Undervalued Growth Stocks To Buy and the 11 Best AI ETFs to Invest In 2023.