5 Best Construction Stocks To Buy Now

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In this article, we discuss 5 best construction stocks to buy now. If you want to see more stocks in this selection, check out 12 Best Construction Stocks To Buy Now

5. NVR, Inc. (NYSE:NVR)

Number of Hedge Fund Holders: 32

NVR, Inc. (NYSE:NVR) is a Virginia-based homebuilder in the United States. It engages in the construction and sale of single-family detached homes, townhomes, and condominium buildings under the Ryan Homes, NVHomes, and Heartland Homes brands. NVR, Inc. (NYSE:NVR)’s Q3 revenue of $2.74 billion climbed 17.1% year-over-year, beating estimates by $170 million. Settlements in the third quarter of 2022 increased by 5% to 5,949 units, compared to 5,683 units in the third quarter of 2021.

On November 14, KeyBanc analyst Kenneth Zener raised the price target on NVR, Inc. (NYSE:NVR) to $5,120 from $4,800 and kept an Overweight rating on the shares. 

According to Insider Monkey’s Q2 data, NVR, Inc. (NYSE:NVR) was part of 32 hedge fund portfolios, compared to 39 in the prior quarter. Ric Dillon’s Diamond Hill Capital is the largest stakeholder of the company, with 127,076 shares worth $508.8 million. 

Here is what Ensemble Capital specifically said about NVR, Inc. (NYSE:NVR) in its Q3 2022 investor letter:

“NVR, Inc. (NYSE:NVR): The US housing market has been unstable so far this year, as rising mortgage rates and higher housing prices have rapidly reduced affordability. Fortunately for existing homeowners, most of whom own their houses outright or have locked in low, fixed mortgage rates, rising rates have not directly impacted their finances unless they have an outstanding variable-rate home equity line of credit.

Homebuilders, who rely on incremental demand for housing, have seen demand dry up in response to declining affordability. Single-family home building permits have plummeted in recent months back to pre-pandemic levels.

That’s the bad news. On the bright side, the building materials supply chain, which delayed construction and increased the cost to build a home, is rapidly improving. This bodes well for homebuilders like NVR with a track record of cost discipline. In other words, even if NVR’s average selling price declines, it can maintain attractive gross margins if they simultaneously control costs…” (Click here to read the full text)

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