13 Stocks Jim Cramer Recently Shed Light On

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

Number of Hedge Fund Holders: 59

Toll Brothers, Inc. (NYSE:TOL) is one of the 13 stocks Jim Cramer recently shed light on. During the episode, Cramer mentioned the stock as he discussed the perils of the housing market and commented:

“Alright, now, the losers. Let’s start with housing. We’re seeing anemic new housing starts. We’ve seen terrible mortgage numbers. The home builders have put up awful reports. Inventories are beginning to rise at some of the big builders, so they’re cutting price. Home building is a terrible business right now. You can’t touch this group until the Fed starts cutting rates. Toll Brothers, Lennar, KB Home, all weaker, all toxic.”

Toll Brothers (NYSE:TOL) builds and sells luxury homes, condominiums, and rental apartments, and also provides custom design options and community amenities. Additionally, the company operates related services in architecture, engineering, mortgage, and home technology to support a wide range of upscale homebuyers. Baron Real Estate Fund stated the following regarding Toll Brothers, Inc. (NYSE:TOL) in its Q1 2025 investor letter:

“Toll Brothers, Inc. (NYSE:TOL) is a leading luxury homebuilder in the U.S. with an exceptional management team and a large, valuable owned land real estate portfolio. Toll Brothers is more insulated than its peers from elevated mortgage rates because approximately 25% of Toll Brothers home buyers pay 100% in cash.

The company is valued at only 1.1 times 2025 estimated tangible book value and a P/E multiple of less than 7 times earnings per share. In the past, Toll Brothers’ shares have appreciated to a peak multiple of 2.0 times tangible book value which would represent over 50% upside. We believe a multiple of 1.8 to 2.0 times tangible book value will ultimately be warranted based on the company’s aspirations to generate a consistent return on equity in a range of high teens up to 20% or more.”