4. Toll Brothers, Inc. (NYSE:TOL)
Number of Hedge Fund Holders as of Q3: 54
Greenhaven Associates’ Equity Stake: $697.32 Million
Founded in 1967 in Pennsylvania by brothers Robert and Bruce Toll and headquartered in Fort Washington, Pennsylvania, Toll Brothers, Inc. (NYSE:TOL) is a prominent American homebuilding company specializing in building residential and commercial properties across the United States. Operating in over 60 cities across 24 states, in 2024, Toll Brothers celebrated a decade of recognition on the Fortune World’s Most Admired Companies list. Additionally, Chairman and CEO Douglas C. Yearley, Jr. was honored as one of Barron’s Top 25 CEOs the same year. The company has also received the prestigious Builder of the Year award from Builder magazine and remains the only homebuilder to earn Professional Builder magazine’s Builder of the Year title twice.
Toll Brothers, Inc. (NYSE:TOL) is known for its high-end homes, with an average selling price of $844,400, varying by region. Additionally, the company has expanded beyond single-family homes to offer townhouses, condominiums, luxury apartments, and student housing. Moreover, Toll Brothers provides services in mortgage financing, insurance, home automation, security, and landscaping, making it a comprehensive player in the housing market. It also operates Toll Integrated Systems, which manages a manufacturing, assembly, and distribution center in Pennsylvania, further enhancing its efficiency in home construction and delivery. The company’s strategic approach to diversification and high-quality developments has solidified its reputation as a leading luxury homebuilder in the United States.
Greenhaven Associates owned roughly 5.54 million shares of the company as of Q4 2024, with a total value of over $697.32 million. During the fourth quarter of 2024, the fund decreased its stake in Toll Brothers, Inc. (NYSE:TOL) by 1%. However, by the end of the September quarter, 54 funds out of the 900 funds tracked by Insider Monkey held stakes in Toll Brothers worth over $1.73 billion, up from 46 funds by the end of Q2 which suggests an overall positive hedge fund sentiment about the stock.
The most recent earnings results of Toll Brothers, Inc. (NYSE:TOL) were reported on December 10th, 2024, for the fourth quarter of its fiscal year 2024 which ended in October. It beat the consensus estimate of $4.35 by $0.28, reporting earnings per share for the quarter to be $4.63 against $4.11 EPS for the same period in 2023. October marked the end of the fourth consecutive quarter of this fiscal year wherein the company beat analyst expectations for its EPS. The quarterly net income was reported as $475.41 million, up 6.71% compared to $445.5 million for the same quarter last year. Operating income was $635.02 million, up 9.52% from the same quarter of 2023.
Baron Real Estate Fund stated the following regarding Toll Brothers, Inc. (NYSE:TOL) in its Q2 2024 investor letter:
“We trimmed our position in Toll Brothers, Inc. (NYSE:TOL), America’s leading luxury homebuilder, during the second quarter following exceptionally strong share price appreciation over the last year and the Fund’s resulting large position size. Toll Brothers remains the largest position in the Fund, and we continue to be enthusiastic about the company’s long-term prospects.
Our meetings with CEO Doug Yearley and other key members of the company’s management confirm our view that the long-term prospects remain compelling. We believe Toll Brothers has the ability to grow its community count of homes by approximately 10% per year as the company continues to gain market share against its mostly smaller private competitors who lack scale advantages, brand awareness, and access to attractively priced financing. Further, Toll Brothers has a long runway for multi-decade growth as it targets the fastest growing income demographic in the U.S. – 16 million households with annual incomes of at least $200,000. According to the U.S. Census Bureau (September 2023), households with over $200,000 in annual income have grown approximately 10 times faster than all U.S. households in the last 10 years. Currently, Toll Brothers has captured only 0.06% of this important demographic group. For additional reasons we remain optimistic on our investment in Toll Brothers, please see the “Top contributors” section of our first quarter 2024 shareholder letter.”
