Lennar (LEN) Declined on Rising Rates

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 Lennar Corporation (NYSE:LEN) in the first quarter 2023 investor letter. Based in Miami, Florida, Lennar Corporation (NYSE:LEN) is a home builder. On June 29, 2023, Lennar Corporation (NYSE:LEN) stock closed at $123.78 per share. One-month return of Lennar Corporation (NYSE:LEN) was 10.52%, and its shares gained 65.92% of their value over the last 52 weeks. Lennar Corporation (NYSE:LEN) has a market capitalization of $35.35 billion.

Blue Tower Asset Management made the following comment about Lennar Corporation (NYSE:LEN) in its first quarter 2023 investor letter:

“This quarter, we exited our homebuilder stocks of Lennar Corporation (NYSE:LEN) and D.R. Horton (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.”

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Lennar Corporation (NYSE:LEN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held Lennar Corporation (NYSE:LEN) at the end of first quarter 2023 which was 54 in the previous quarter.

We discussed Lennar Corporation (NYSE:LEN) in another article and shared Baron Real Estate Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.

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