Below we took a look at George Soros Net Worth and Top 5 Holdings Heading into 2023. For our methodology and a more comprehensive list please see George Soros Net Worth and Top 10 Holdings Heading into 2023.
5. D.R. Horton, Inc. (NYSE:DHI)
Value of Soros Fund Management’s 13F Position: $176 million
Number of Hedge Fund Shareholders: 43
Kicking off the top five of billionaire George Soros’ top holdings is homebuilder D.R. Horton, Inc. (NYSE:DHI), which the wealthy philanthropist’s family office trimmed its stake in by 13% during Q3, ending the quarter with 2.62 million shares. Hedge fund ownership of DHI dipped during each of the first three quarters of 2022, falling by 22% during that time.
Despite a challenging macro environment for homebuilders which is expected to persist throughout 2023, D.R. Horton, Inc. (NYSE:DHI) has posted some impressive results. In its fiscal Q4, the company grew sales by 19% to $9.6 billion, while its EPS jumped by 26% year-over-year to $4.67. Wedbush analyst Jay McCanless believes DHI is one of the homebuilder stocks that is worth owning in 2023 should the rate environment be favorable, given its ability to more quickly react to market demands and build homes in a timely manner. He has an ‘Outperform’ rating on the stock.
According to Third Avenue Management, D.R. Horton, Inc. (NYSE:DHI) complies with Founder Marty Whitman’s “Safe and Cheap” maxim, as discussed in the fund’s Q2 2022 investor letter:
“D.R. Horton, Inc. (NYSE:DHI) is the largest homebuilder in the US by volume (the company sold more than 90k homes in the past year) with a well-recognized focus on delivering quality product at the entry-level price point (its average selling price is less than $400k) and market-leading positions in key Sunbelt markets.
While the near-term outlook for DR Horton remains uncertain given the adjustments occurring in the US residential markets, the medium-to-long-term prospects for volume-based homebuilders with super-strong balance sheets and scale advantages continues to be promising in Fund Management’s view. More specifically, (i) residential inventories remain around record-low levels in most major markets when gauged by aggregate units available (see chart below), (ii) demand for single-family residences seem to have multiple secular drivers as the largest generation in US history (the “millennial cohort”) enters its prime home buying years and desires more space not only due to “life events” but also “remote” and “hybrid” working arrangements, and (iii) significant inflation in rental rates for multi-family units in urban areas has left the rent-to-own proposition for single-family homes in suburban areas in a compelling range (particularly in the Sunbelt region which is experiencing outsized job growth and wage growth relative to broader national figures).
In Fund Management’s view, the two industry participants that seem most likely to take part in this shift include DR Horton and Lennar Corp. (a long-held position in the Fund). In conjunction, these two “blue-chip builders” now account for approximately 10% of the Fund’s capital, as well as roughly one out of every five new homes built in the Sunbelt. They would also qualify under Third Avenue Founder Marty Whitman’s “Safe and Cheap” maxim as both companies are nearly “net-cash” (i.e., more cash than debt) with common stocks trading at less than five times trailing earnings, on average.”
