5 Best Micro-Cap Stocks to Buy According to Hedge Funds

2. Hovnanian Enterprises, Inc. (NYSE:HOV)

Number of Hedge Fund Holders: 18 

Hovnanian Enterprises, Inc. (NYSE:HOV) is a New Jersey-based homebuilding firm. On March 1, the company posted earnings for the first fiscal quarter of 2022, reporting earnings per share of $3.07 and a revenue of more than $565 million, down 1.6% year-on-year. The firm guided revenue of $700 million to $750 million for the second fiscal quarter and a gross margin of 23% to 25%. For the full fiscal year, the guidance for the revenue was $2.8 billion to $3 billion and gross margin was expected to be between 23.5% to 25.5%. 

Hovnanian Enterprises, Inc. (NYSE:HOV) stands to benefit from the increase in home prices as inflation and interest rates also rise. However, the Dallas Fed has warned that US home prices risk going out of step with market fundamentals if this increase is not checked. 

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Hovnanian Enterprises, Inc. (NYSE:HOV) with 214,415 shares worth more than $27 million.