What Did Jim Cramer Say About These 19 Stocks Recently?

13. Toll Brothers Inc. (NYSE:TOL)

Number of Hedge Fund Holders: 65

When asked about Toll Brothers Inc. (NYSE:TOL), Cramer expressed his admiration for the company and its CEO, but also presented some risks that the stock may face. Here’s what he said:

“Okay so listen to me and listen good. It’s Doug Yearley (Toll’s CEO) and you know Doug, he’s the bomb, and what I really care about here is they raise the dividend, and this is the big fly in the ointment. If president Trump goes after the lumber industry of Canada, then they have to raise the price of homes. You got to hope that the president does not go after lumber even though that’s an area where you could easily take down the Canadians that would make me want to sell Toll; otherwise, I want to buy it.

Baron Real Estate Fund stated the following regarding Toll Brothers, Inc. (NYSE:TOL) in its Q4 2024 investor letter:

“As noted earlier in this letter, we chose to decrease the Fund’s homebuilder exposure in D.R. Horton, Inc., Lennar Corporation, and Toll Brothers, Inc. (NYSE:TOL) in the most recent quarter following exceptional share price performance over the prior two years. From September 30, 2022, through September 30, 2024, shares of Toll Brothers, Lennar, and D.R. Horton increased 269%, 155%, and 184%, respectively. Homebuilder valuations for our investments had approached near peak valuations from prior cycles (at or above 2 times tangible book value). We also have concerns that the recent 100 basis point increase in interest rates will further crimp housing affordability. This could lead to flattening home prices and elevated homebuilder incentives to entice buyers to purchase a home. Further, the new administration policy decisions around tariffs, immigration, and deportation may increase the cost for labor and materials. The issues cited above may lead to pressure on homebuilder gross margins in 2025.

The shares of several homebuilders and residential-related building product/ services companies foreshadowed some of these concerns in the fourth quarter and valuations are becoming more compelling. We are monitoring developments closely and may look to acquire additional shares in 2025…” (Click here to read the full text)