Here’s Why Blue Tower Asset Management Exited D.R. Horton (DHI)

Blue Tower Asset Management, an investment Management Company, released its first quarter, 2023 investor letter. A copy of the same can be downloaded here. In the quarter, the Blue Tower Global Value returned 14.10% net of fees (14.40% gross). Recovery of the prices of Sberbank and Meta Platforms holdings led to the outperformance of the fund in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Blue Tower Asset Management highlighted stocks like D.R. Horton, Inc. (NYSE:DHI) in the first quarter 2023 investor letter. Headquartered in Arlington, Texas, D.R. Horton, Inc. (NYSE:DHI) is a homebuilding company.  On June 29, 2023, D.R. Horton, Inc. (NYSE:DHI) stock closed at $120.34 per share. One-month return of D.R. Horton, Inc. (NYSE:DHI) was 7.43%, and its shares gained 71.69% of their value over the last 52 weeks. D.R. Horton, Inc. (NYSE:DHI) has a market capitalization of $41.044 billion.

Blue Tower Asset Management made the following comment about D.R. Horton, Inc. (NYSE:DHI) in its first quarter 2023 investor letter:

“This quarter, we exited our homebuilder stocks of Lennar (NYSE:LEN) and D.R. Horton, Inc. (NYSE:DHI). While the companies have excelled since we invested, rising rates have caused contract cancellations to explode higher and their construction backlog to shrink significantly. Compared to the Q1 of the prior year, Lennar’s 2023 Q1 saw a 33% decrease in construction backlog and a 18% decline in new orders (by dollar value). The cancellation rate increased to 21% from 10% last year2. While both homebuilders are still quite profitable and well-run, we wanted to exit before they are impacted by an impending recession. We used the capital to buy shares of the Charles Schwab (NYSE:SCHW) which dropped in price due to the 2023 banking crisis.”

Photo by Jens Behrmann on Unsplash

D.R. Horton, Inc. (NYSE:DHI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. AAs per our database, 46 hedge fund portfolios held D.R. Horton, Inc. (NYSE:DHI) at the end of first quarter 2023 which was 46 in the previous quarter.

We discussed D.R. Horton, Inc. (NYSE:DHI) in another article and shared the list of stocks whose price targets were recently raised by analysts. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.

Suggested Articles:

• 15 Hardest Sports in the World Ranked
• 16 Best Places to Live in Upstate New York for Families
• 25 Largest Airports in the World

Disclosure: None. This article is originally published at Insider Monkey.