5 Construction Stocks Hedge Funds Like as Spending Slumps

4. NVR, Inc. (NYSE:NVR)

Number of Hedge Fund Shareholders: 40

Hedge funds have been increasing their number of stakes in NVR, Inc. (NYSE:NVR) over each of the past three quarters, with ownership of the stock jumping by 38% during that time. Ric Dillon’s Diamond Hill Capital owns by far the largest stake in NVR among the funds tracked by our database, holding 124,583 shares, and believes the company is well positioned for long-term outperformance (more on that below).

Homebuilder and mortgage bank NVR, Inc. (NYSE:NVR) has never conducted a stock split, which is why its shares trade at nearly $4,400 and approached $6,000 at their 2021 peak. But with a new CEO incoming, it’s possible the company will finally look to make its shares more palatable to the average investor. One benefit of keeping your share count low is that it makes for some eye-popping earnings reports, as evidenced by the company’s Q2 EPS of $123.65, which still wasn’t enough to hit estimates.

Here is the Diamond Hill Large Cap Fund’s take on NVR, Inc. (NYSE:NVR), culled from the fund’s Q1 2022 investor letter:

“NVR is a homebuilder and mortgage bank. Its stock, along with other housing stocks, came under pressure in Q1 as mortgage rates rose and concerns that continued interest rate increases will cause a slowdown in new home demand. These near-term headwinds have not impacted our long-term investment thesis, and we believe NVR is well positioned to outperform over the long run.”