Mario Gabelli is Selling These 5 Stocks in 2022

4. Toll Brothers, Inc. (NYSE:TOL)

Number of Hedge Fund Holders: 38

Toll Brothers, Inc. (NYSE:TOL) designs, builds, markets, and sells detached and attached homes in luxury residential communities in the United States. The company operates through two business segments: Traditional Home Building and City Living.

Inflation is on the rise and so are mortgage rates, something that might not be good for business for Toll Brothers, Inc. (NYSE:TOL). Freddie Mac reported that rates on a 30-year fixed-rate mortgage have gone up to 5% from 3%, registering the highest rate of increase since the 1980s. Billionaire investor Mario Gabelli sold his hedge fund’s stakes in the company in Q1 2022 and is now safe from the effects that high mortgage rates might have on companies like Toll Brothers, Inc. (NYSE:TOL).

On April 13, JPMorgan analyst Michael Rehaut lowered his price target on Toll Brothers, Inc. (NYSE:TOL) to $51 from $58 and reiterated a Neutral rating on the shares. Rehaut noted that investors are wary of homebuilding stocks this earnings season, given rising interest rates, and do not expect the homebuilding sector to record a significant rebound.

By the end of the fourth quarter of 2021, 38 hedge funds were long Toll Brothers, Inc. (NYSE:TOL) with stakes worth $808.70 million. This is compared to 31 positions in Q3 2021 with stakes of $705.64 million.