We recently published an article titled Greenhaven Associates: Top 10 Stocks to Invest in. In this article, we are going to take a look at where Lennar Corporation (NYSE:LEN) stands against the other stocks.
Edgar “Ed” Wachenheim III is the founder, CEO, and chairman of Greenhaven Associates, a hedge fund management company that manages over $7 billion in investments. He serves as the vice chairman of the board of Central National-Gottesman, the chairman of WNET’s board, a trustee at the Museum of Modern Art, and a life trustee who previously chaired both the executive and investment committees of the New York Public Library. Additionally, he is a trustee emeritus and former vice chair at Skidmore College, as well as a trustee emeritus and past board president of Rye Country Day School. A notable figure in the investment community, Ed’s most recent, prominent achievement is the publishing of his book “Common Stocks and Common Sense” in 2016.
Wachenheim’s book, published by Wiley in April 2016, details his investment strategies and provides insight into his career as a successful value investor. In “Common Stocks and Common Sense”, he explains his approach to investing in undervalued companies that face a low probability of permanent loss, with a goal of achieving an annual return between 15% and 20%. He typically holds stocks for multiple years until they appreciate as expected and makes very few changes to his holdings in the shorter term. Even when his investment thesis proves incorrect, Wachenheim argues that his investments still tend to generate positive returns, given that the stock market has historically returned an average of 9% to 10% annually. His strong emphasis on downside risk and capital preservation is a hallmark of his investment philosophy. He also contributed a chapter to the 2017 book “Harriman’s New Book of Investing Rules”, and a second edition of his own book was released in 2022.
Greenhaven Associates was founded in 1987 as a branch of Central National-Gottesman, one of the largest global marketers and distributors of paper, packaging, wood, and metals. Wachenheim invests with a long-term time horizon of three to four years, disregarding short-term performance, analyst predictions, and hedge fund sentiment. This disciplined approach seems to work in Greenhaven Associates’ favor, as the hedge fund has achieved an impressive average annual return of approximately 19% between 1988 and 2017.
Beyond his career in finance, Wachenheim has been deeply involved in philanthropy and nonprofit leadership. He served on the Skidmore College board from 1993 to 2001, where three of his children studied, and later became vice chair and chair of the investment committee until 2003. He has also been a long-time supporter of Williams College, his own alma mater, where a new science center is named after him. Additionally, he is a life trustee of the New York Public Library, where the Trustees Room has been named in his honor. Wachenheim chaired the board of WNET, the PBS affiliate, from 2017 to 2022, having joined the board a year earlier.
His extensive philanthropic work includes serving on the boards of UJA-Federation of New York, the New York Foundation (1990–1999), and the Arthur Ross Foundation. He and his wife oversee the Sue & Edgar Wachenheim Foundation, a charitable organization with reported assets of $438 million in 2022. The foundation has directed significant contributions to cultural and educational institutions, including Williams College, Skidmore College, the Museum of Modern Art, WNET, and the New York Public Library.
According to its 13F filing for Q4 2024, Greenhaven Associates held stocks worth a total value of over $6.7 billion with stakes in 22 companies. Notably, the hedge fund’s recent portfolio modification has revealed that over 65% of its hedge fund is invested in just four stocks.
Our Methodology
The stocks discussed below were picked from Greenhaven Associates’ 13F filings for the fourth quarter of 2024. They have been compiled in the ascending order of Greenhaven Associates’ stake in them as of December 31, 2024. To provide readers with a more holistic analysis of each stock, we have included the hedge fund sentiment regarding each company using data from over 900 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds show interest in? The reason is simple: our research has shown that we can outperform the market by imitating the latest top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A construction crew installing roof tiles on a newly built row home.
Lennar Corporation (NYSE:LEN)
Number of Hedge Fund Holders as of Q3: 68
Greenhaven Associates’ Equity Stake: $1.25 Billion
Headquartered in Miami-Dade County, Florida, Lennar Corporation (NYSE:LEN) is the second-largest home construction company in the United States as of 2023. Originally founded as F&R Builders in 1954 by Leonard Miller and Arnold Rosen, the company was later renamed Lennar in 1971. It became a public company listed on the New York Stock Exchange in 1972 and has since expanded significantly. Lennar Corporation (NYSE:LEN) presently operates in 26 states and 75 markets nationwide and has diversified its portfolio beyond home construction by investing in luxury developments, multifamily and single-family rental properties, mortgage lending through Lennar Mortgage, and property technology via LenX.
Over the decades since 1972, Lennar Corporation (NYSE:LEN) has grown through multiple strategic acquisitions, including US Home in 2000 wherein it doubled in size, WCI Communities in 2017, and a prominent merger with CalAtlantic Homes in 2018, which made it the largest homebuilder in the U.S. for a brief period. The company has built over one million homes since its inception and continues to be a dominant force in the housing market, leveraging innovation and large-scale operations to maintain its industry leadership.
On February 7, 2025, Lennar Corporation (NYSE:LEN) completed the planned taxable spin-off of Millrose Properties, Inc. It subsequently distributed roughly 80% of Millrose’s shares to its shareholders. This strategic move is planned to allow both companies to operate with greater flexibility and is expected to create long-term value for investors while positioning Lennar and Millrose for continued success in their respective markets.
For the quarter ended November 2024, Lennar Corporation (NYSE:LEN) posted revenues of $9.95 billion which is 9.31% down from the revenues of $10.97 billion in the same quarter of the previous year. The revenue fell 1.66% short of the consensus estimate of $10.11 billion for the quarter. The company reported quarterly earnings of $4.06 per share in Q4, $0.76 less than the EPS for the quarter a year ago. On January 14, 2025, the company published its earnings call transcript wherein it announced that its Board of Directors had declared a quarterly cash dividend of $0.50 per share for both Class A and Class B common stock payable on February 12, 2025, to holders of record at the close of business on January 29, 2025.
Greenhaven Associates held roughly 9.16 million shares of Lennar Corporation (NYSE:LEN) as of Q4 2024, which represents 18.48% of its portfolio. The company continues to demonstrate resilience and strategic growth, as evidenced by its successful spin-off of Millrose Properties, which is expected to enhance long-term value for investors. Despite a slight decline in revenue and earnings, the company maintains strong financial health, supported by consistent dividend payments and a commitment to shareholder returns, positioning it for sustained success in the homebuilding industry.
Overall LEN ranks 2nd on our list of Greenhaven Associates’ top stock picks. While we acknowledge the potential for LEN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LEN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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