Toll Brothers Inc (TOL), Standard Pacific Corp. (SPF), and NVR, Inc. (NVR): Undervalued Housing Stocks With Potential of Becoming Superstars

Enter NVR, Inc. (NYSE:NVR)

NVR, Inc. (NYSE:NVR) – a homebuilder which offers homes under Ryan Homes, Fox Ridge Homes, and Rymarc brands – has been a steady performer with a 33% gain in stock price over the last 12 months. The rally lost some of its momentum as the stock dropped 5.5% last month. However, it may be a boon for investors actively looking for value. What caused the recent drop is also interesting – the company missed analysts’ expectations even after posting a 74% growth in net income to $35 million for the quarter ended March 31.

Currently priced at 13.9 times its forward earnings, the company has a low debt equity ratio of 0.39. Another noteworthy factor which is likely to drive stock price is the company’s top line growth, which maintained its momentum despite a tough quarter. Revenue jumped to $770.3 million during the quarter, up 28%.

Foolish bottom line

As long as homebuilders continue to demonstrate revenue growth, prospects of boosting the bottom line remain bright and these companies have just showed they are capable of maintaining higher top line. As such, their shares can still go higher even after performing well so far this year.

The article Undervalued Housing Stocks With Potential of Becoming Superstars originally appeared on Fool.com and is written by Jacob Wolinsky.

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