Bretton Capital Management, an investment management company, released “Bretton Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The market is experiencing a period of high returns, with two consecutive years of around 25% returns and 15 years of mid-teens returns, prompting investors to be cautious. The average stock market return is around 9-10% per year, historically, based on corporate earnings growth and dividends and buybacks. The 20 companies the fund owns are well-positioned and expected to perform well. Against this backdrop, in the fourth quarter, the fund returned -0.98% compared to 2.41% return for the S&P 500. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
In its fourth quarter 2024 investor letter, Bretton Fund emphasized stocks such as NVR, Inc. (NYSE:NVR). Headquartered in Reston, Virginia, NVR, Inc. (NYSE:NVR) is a home builder that operates through Homebuilding and Mortgage Banking segments. The one-month return of NVR, Inc. (NYSE:NVR) was -13.15%, and its shares lost 1.81% of their value over the last 52 weeks. On February 18, 2025, NVR, Inc. (NYSE:NVR) stock closed at $7,263.40 per share with a market capitalization of $20.946 billion.
Bretton Fund stated the following regarding NVR, Inc. (NYSE:NVR) in its Q4 2024 investor letter:
“Thirty-year traditional mortgage rates were over 6% for all of 2024, the highest they have been since the 2008 financial crisis, a sharp change from 2021 when they were below 3% for part of the year. Existing house sales hit their lowest levels since 1995, and new housing starts were down 4% from 2023. Lean times for the real estate industry.
NVR, Inc. (NYSE:NVR) seems to have not noticed these market trends. They sold 22,560 houses in 2024, 21,540 in low-interest-rate 2021, and 19,668 in pre-Covid 2019. They keep grinding away with their basic business model, and they keep driving their earnings and buying back stock. In 2019, NVR earned $221 per share; in 2024, selling only 15% more houses, they earned $507 per share. NVR stock gained 17% on the year.”
A team of construction workers laboring together to build a townhome complex.
NVR, Inc. (NYSE:NVR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held NVR, Inc. (NYSE:NVR) at the end of the third quarter which was 47 in the previous quarter. While we acknowledge the potential of NVR, Inc. (NYSE: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 timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article we discussed NVR, Inc. (NYSE:NVR) and shared the list of highest-priced stocks. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.