Jim Cramer Recently Shed Light on These 9 Stocks

1. Toll Brothers, Inc. (NYSE:TOL)

Number of Hedge Fund Holders: 64

Cramer discussed the recent contrasting cycles in the market, specifically addressing the bearish trend in the housing sector. He pointed out that Toll Brothers, Inc. (NYSE:TOL), one of his preferred home builders, recently reported a mixed quarter, and as a result, its stock took a significant hit. Cramer noted that the downturn was not isolated to just Toll Brothers, the entire homebuilding sector experienced a similar decline. He added:

“Wow. Conference call was instructive because it showed there are cracks developing with lower average housing prices around the country. Some very soft markets, something that’s not supposed to happen when the Feds cut rates.

Mortgage rates are still way too high for this group. I want you to listen [to] what CEO, Doug Yearley, on the conference call said, “Those areas where the buyers are a bit more hesitant, I think it’s number one. Those areas that have had more significant price appreciation through the Covid years than other areas so instead of a 40 or 50%… percentage price increase over the last five years, there are end markets where there [has] been a 60%, 70%, 80%… and a 100% price increases, that includes Florida, primarily Austin, Texas. Those prices have to come down. That’s, that’s raw inflation. Those have to come down before we beat inflation in this country. Toll Brothers created the entire industry.”

Toll Brothers, Inc. (NYSE:TOL) specializes in designing and constructing high-end homes, such as condominiums and single-story residences, while also developing communities that offer a range of amenities.

While we acknowledge the potential of Toll Brothers, Inc. (NYSE:TOL) 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 more promising than TOL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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