According to the filing, Capital Growth Management owned 1.8 million shares of Whirlpool Corporation (NYSE:WHR) at the beginning of April. Whirlpool Corporation (NYSE:WHR)’s stock price has more than doubled in the last year, as the manufacturer of laundry and kitchen appliances has been a somewhat common way to play a housing recovery. The stock carries trailing and forward P/Es of 18 and 11, respectively- reflecting high expectations from the Street- and the five-year PEG ratio is only 0.5. Citadel Investment Group, managed by billionaire Ken Griffin, cut its stake during Q1 but still had over 1 million shares in its portfolio (check out more stocks Griffin owns).
$7.8 billion market cap homebuilder Lennar Corporation (NYSE:LEN) was another of Heebner’s top picks with the filing disclosing ownership of 4.9 million shares. Revenue was up by over 30% in Lennar Corporation (NYSE:LEN)’s most recent quarter compared to the same period in the previous fiscal year. We’d note that Lennar Corporation (NYSE:LEN) is a popular short, with the most recent data showing that short sellers are responsible for 23% of the float, and of course it is quite dependent on the housing market itself. Billionaire Stanley Druckenmiller reported a position of 2.8 million shares at the end of the first quarter of 2013 (research more stocks Druckenmiller likes).
Capital Growth Management apparently likes housing: its fifth largest holding by market value was another homebuilder, D.R. Horton, Inc. (NYSE:DHI). Revenue and earnings have also been surging at D.R. Horton, Inc. (NYSE:DHI), and the forward P/E of 14 is low enough that we think the company is worth a look- while growth rates will come down- analysts seem to actually be looking for a decline in earnings- it’s still a potential value play if housing continues to perform well. Of course, investors should be sure that their portfolio is not too concentrated on the housing market.
Disclosure: I own no shares of any stocks mentioned in this article.