5 Best Home Builder Stocks To Buy Now

3. NVR, Inc. (NYSE:NVR)

Number of Hedge Fund Shareholders: 39

There’s been a 38% increase in the number of funds long NVR, Inc. (NYSE:NVR) since the middle of 2021, pushing the company into third place among hedge funds’ top homebuilder stock picks. Ric Dillon’s Diamond Hill Capital owns 108,803 NVR shares as of March 31, valued at over $606 million. The fund also discussed NVR, one of its top performers in Q1, in the firm’s latest Large Cap Strategy investor letter, linked to below.

Bank of America was bullish on NVR, Inc. (NYSE:NVR) shares in 2023 back in January, citing their historical outperformance when the housing market has been weaker. It had a $5,500 price target on the stock and considered the company’s its top pick in the home building space. On the other hand, Deutsche Bank has a ‘Sell’ rating and $4,400 price target on NVR, noting that the company’s valuation appears to be too rich based on where fundamentals are likely to trend next year. NVR earned $99.89 per share in Q1, beating estimates by $10.93.

The Diamond Hill Large Cap Strategy is bullish on NVR, Inc. (NYSE:NVR)’s strong Q4 results and balance sheet according to the fund’s Q1 2023 investor letter:

“We did have several strong performing stocks this quarter. Our top contributors to return included NVR, Inc. (NYSE:NVR), Amazon, Alphabet, Microsoft and Booking Holdings, all of which posted double-digit gains.

Homebuilding stocks had a strong start to 2023. Companies in this industry typically perform well ahead of spring selling season and have benefitted this year from mortgage rates dropping and better than expected sales activity. In addition to the broad positive sentiment, homebuilder NVR also reported strong Q4 results and continues to have a best-in-class balance sheet.”