Billionaire David Harding’s 10 Stock Picks with Huge Upside Potential

6. Meritage Homes Corporation (NYSE:MTH)

Winton Group’s stake: $13,014,710

Upside Potential: 38.89%

Number of Hedge Fund Holders: 39

Meritage Homes Corporation (NYSE:MTH) is a prominent U.S. homebuilder focused on single-family attached and detached homes, primarily in high-growth markets across 12 states. Operating through three regional segments—West, Central, and East—and a financial services segment, the company offers title, mortgage, and insurance services via subsidiaries like Carefree Title and Meritage Insurance. As of December 31, 2024, it was actively selling homes in 292 communities, with an average sales price of approximately $406,000.

In Q1 2025, Meritage Homes Corporation (NYSE:MTH) reported strong results despite ongoing economic uncertainty. The company sold nearly 3,900 homes and closed 3,416, generating $1.3 billion in home revenues. Over 60% of closings came from homes sold within the same quarter, aided by their strategy of releasing homes within 60 days of completion. This approach helped offset high mortgage rates and cautious buyer sentiment. Despite affordability challenges, buyer demand remains solid, especially in the entry-level market. Meritage continues to focus on maintaining steady sales pace, optimizing margins, and managing land positions carefully in a volatile housing market.

Meritage Homes Corporation (NYSE:MTH) ‘s strategy focuses on affordability, certainty, and move-in-ready homes with a 60-day closing, creating a competitive edge amid resale inventory. At the end of the quarter, spec and backlog units totaled ~8,800, with spec homes up 13% year-over-year. Completed specs held steady at 39%. Strong backlog conversion lowered ending backlog to ~2,000 homes. Home closing revenue reached $1.3B, with ASP down due to incentives. Despite market softness, gross margin remained resilient at 22%, supported by cost savings and strategic inventory management.