Is it Worthy to Own Meritage Homes (MTH) Shares?

Sterling Partners Equity Advisors, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be seen here. The Fund owns well-capitalized companies that earn good returns over cycles. They sell differentiated products and services that serve a niche, with a “moat” to quote Morningstar, and the fund buys them at what they believe are attractive prices. The fund will be looking for more of them in 2022. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Sterling Partners Equity Advisors, in its Q4 2021 investor letter, mentioned Meritage Homes Corporation (NYSE:MTH) and discussed its stance on the firm. Founded in 1985, Meritage Homes Corporation (NYSE:MTH) is a Scottsdale, Arizona-based home construction company with a $3.0 billion market capitalization, and is currently spearheaded by its CEO, Steven J. Hilton. Meritage Homes Corporation (NYSE:MTH) delivered a -32.11% return since the beginning of the year, while its 12-month returns are down by -10.55%. The stock closed at $82.87 per share on March 25, 2022.

Here is what Sterling Partners Equity Advisors has to say about Meritage Homes Corporation (NYSE:MTH) in its Q4 2021 investor letter:

“Meritage Homes is a large public homebuilder in the United States focused on the entry-level and first move-up buyers in Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee.

Meritage had their highest gross margin, 29.7%, and EPS, $5.25, during the third quarter of 2021. Management believes the housing market remains solid from continued demand with historically low interest rates and limited housing supply.

We own the stock on the simple thesis that our modern society creates a stable demand for new homes as people need shelter and want modern designs.”

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Our calculations show that Meritage Homes Corporation (NYSE:MTH) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Meritage Homes Corporation (NYSE:MTH) was in 33 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 27 funds in the previous quarter. Meritage Homes Corporation (NYSE:MTH) delivered a -29.16% return in the past 3 months. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.