1. NVR, Inc. (NYSE:NVR)
Number of Hedge Fund Holders: 45
NVR, Inc. (NYSE:NVR) is a homebuilding and mortgage banking company that operates in the United States. It constructs and sells single-family homes, townhomes, and condominiums under the Ryan Homes, NVHomes, and Heartland Homes brands. The company primarily serves markets in the East Coast, Midwest, and Southeast through a land-light business model, acquiring finished lots from developers rather than holding large land inventories. NVR also provides mortgage financing and settlement services through its NVR Mortgage division. Revenue is generated through home sales and financial services, catering to a broad range of homebuyers.
NVR, Inc. (NYSE:NVR) achieved notable financial and operational growth in 2024, with consolidated revenues increasing by 11% to $10.5 billion and net income rising 6% to $1.68 billion, alongside a 9% growth in diluted EPS compared to 2023. New orders grew by 4%, supported by a 2% rise in the average sales price, reflecting stronger demand during the first three quarters due to limited supply in the resale market and stabilized mortgage rates. However, demand slowed in the fourth quarter, particularly in the South East segment, as rising mortgage rates and increased home supply affected affordability. Despite a slight decline in the homebuilding gross profit margin to 23.7% and a 3% decrease in backlog units, the backlog’s dollar value grew by 1%, reaching $4.79 billion. The mortgage banking segment also performed well, with income before tax surging 17% to $154.9 million.
Looking ahead, NVR, Inc. (NYSE:NVR) expects that affordability issues, inflationary pressures, interest rate volatility and economic uncertainty may continue to weigh on future demand. The company also anticipates continued cost pressures related to building materials, labor, and land costs, which are expected to impact profit margins based on their ability to manage these costs while balancing sales pace and home prices. Despite these challenges, management believes the company is well positioned to take advantage of opportunities that may arise from future economic and homebuilding market volatility due to the strength of their balance sheet and disciplined lot acquisition strategy.
Overall NVR, Inc. (NYSE:NVR) ranks first on our list of the 8 best low float stocks to invest in now. While we acknowledge the potential of NVR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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