{"id":12663,"date":"2023-08-18T00:56:40","date_gmt":"2023-08-18T00:56:40","guid":{"rendered":"https:\/\/isafespend.com\/investing\/berkshire-hathaway-adds-these-housing-stocks-part-2\/"},"modified":"2023-08-18T00:56:40","modified_gmt":"2023-08-18T00:56:40","slug":"berkshire-hathaway-adds-these-housing-stocks-part-2","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=12663","title":{"rendered":"Berkshire Hathaway Adds These Housing Stocks, Part 2"},"content":{"rendered":"
\n

That the Warren Buffett\/ Charlie Munger-led firm would go to the housing sector for names in which to place money seems odd given the steady rise in interest rates \u2014including the 30-Year fixed mortgage rate. The old pros in Omaha surely have greater wisdom than the rest of us but let\u2019s examine the positions.<\/p>\n

Lennar
\n LEN
\n <\/fbs-ticker> is the second home construction stock that was recently added to the Berkshire Hathaway
\n BRK.B
\n <\/fbs-ticker> fund. The earnings growth over the past 5 years is +36% and this year\u2019s earnings are up by 10.30%. The stock trades with a price-earnings ratio of just 7.98 and at just 1.33 times book value. Shareholder equity greatly exceeds the amount of long-term debt. Lennar pays a dividend of 1.28%.<\/p>\n

In mid-July, Raymond James upgraded its rating on the stock from \u201cmarket perform\u201d to \u201coutperform.\u201d In June, the analysts at Deutsche Bank issued a \u201csell\u201d rating on Lennar with a price target of $105.<\/p>\n

The daily price chart looks like this:<\/p>\n

<\/fbs-ad><\/p>\n

The stock peaked in July at just above $132.50 and has fallen quickly to the current $117.05. The drop below the 50-day moving average (the red line) is accompanied by heavy volume as you can see by the red-ish bar below prices. The relative strength index (RSI, below the price chart) appears about to drop into the \u201coversold\u201d level.<\/p>\n

NVR – NVR, Inc. Stock Price and Quote (finviz.com)<\/p>\n

NVR\u2019s is the third residential construction addition to the Berkshire Hathaway portfolio. It\u2019s trading with a price-to-book ratio of 4.73 and the price-earnings ratio sits at 12.85. These metrics make it a little less of a value stock than the above two adds. Earnings are up by 53% this year and up by 28.30% over the past 5 years. NVR does not pay a dividend, another indicator of \u201cnot quite a value stock.\u201d<\/p>\n

The daily price chart is here:<\/p>\n

It\u2019s also dropped to below the 50-day moving average although the volume does not seem to be heavy.<\/p>\n

The SPDR S&P Homebuilders ETF is the benchmark for the sector. Here\u2019s the daily price chart:<\/p>\n

The uptrend from the beginning of the year for this sector is over. After hitting a peak in July of $85, the ETF has dropped back to $79.38 and now trades below its 50-day moving average.<\/p>\n

The 30-Year fixed mortgage rate may have something today with the slide in the housing stocks \u2014 it\u2019s up at 7.09%. That\u2019s higher than it\u2019s been for over 20 years.<\/p>\n

Note that the CBOE 10-Year Treasury yield is now back up to its 2022 high just under 4.40% (the point-and-figure chart below shows basis points):<\/p>\n

It\u2019s certain that Berkshire Hathaway is looking at the long-term. Still, in the past, the firm has occasionally taken positions and then unloaded them before a year is up. We\u2019ll see.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

That the Warren Buffett\/ Charlie Munger-led firm would go to the housing sector for names in which to place money seems odd given the steady rise in interest rates \u2014including the 30-Year fixed mortgage rate. The old pros in Omaha surely have greater wisdom than the rest of us but let\u2019s examine the positions. Lennar<\/p>\n","protected":false},"author":1,"featured_media":12664,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[],"class_list":{"0":"post-12663","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nBerkshire Hathaway Adds These Housing Stocks, Part 2 | iSafeSpend<\/title>\n<meta name=\"description\" content=\"That the Warren Buffett\/ Charlie Munger-led firm would go to the housing sector for names in which to place money seems odd given the steady rise in\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/isafespend.com\/?p=12663\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Berkshire 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