Warren Buffett’s Recent Buys: Top 3 Stocks

In this article, we discuss Warren Buffett’s top 3 recent buys. To read the detailed analysis of Warren Buffett’s investment strategy and his latest bets, you can go directly to Buffett Stock Portfolio: Warren Buffett’s Recent Buys.

3. D.R. Horton, Inc. (NYSE:DHI)

Stock added to the portfolio in: Q2 2023

Percentage of Berkshire Hathaway’s portfolio as of Q2 2023: 0.2%

D.R. Horton, Inc. (NYSE:DHI) is another home construction company that was added to Buffett’s stock portfolio in the second quarter of 2023. It is the largest home construction company in the United States. Berkshire Hathaway initiated a position in D.R. Horton, Inc. (NYSE:DHI) in Q2 2023 with approximately 5.97 million shares worth $726.454 million.

D.R. Horton, Inc. (NYSE:DHI) posted its Q3 2023 results on July 20. The company reported a GAAP EPS of $3.90, outperforming the estimates by $1.11. On top of that, the company’s revenue was up 10.6% year-over-year to $9.73 billion, exceeding the market expectations by $1.32 billion. Due to its solid earnings, D.R. Horton, Inc. (NYSE:DHI) raised its FY 2023 guidance. The company expects consolidated revenue in the range of $34.7 billion – $35.1 billion, up from prior $31.5 billion – $33.0 billion.

On July 24, Raymond James upgraded D.R. Horton, Inc. (NYSE:DHI)’s stock to Outperform from Market Perform after robust Q3 results. The firm has a $160 price target on the company stock.

Baron Real Estate Fund made the following comment about D.R. Horton, Inc. (NYSE:DHI) in its second quarter 2023 investor letter:

“Our investments in homebuilder companies – Toll Brothers, Inc., Lennar Corporation, and D.R. Horton, Inc. (NYSE:DHI) – performed well in the first six months of 2023. The share price of Toll Brothers increased nearly 60% and the shares prices of Lennar and D.R. Horton each gained more than 35%.

Year-to-date, each company has witnessed a meaningful uptick in demand to buy homes:

Home buyers continue to come off the sidelines and buy homes despite 30-year mortgage rates remaining in the 6.5% to 7.0% range. Several factors are contributing to the recent strength, including pent-up demand to buy homes and fears that mortgage rates could move higher. • The sticker shock of rapidly rising mortgage rates appears to have cooled down. Homebuilders have made homes more affordable to prospective home purchasers by offering mortgage rate buydowns to the mid-5% mortgage rate range while maintaining strong profitability margins. • A dearth of inventory in the existing home market and an overall housing supply shortage is driving home buyers to “stretch their wallet” due to fears that they could miss the opportunity to buy a home.

We remain optimistic about the long-term potential for the Fund’s investments in Toll Brothers, Lennar, and D.R. Horton for several reasons…” (Click here to read the full text)