Opinions
The Panic-Proof Portfolio (Stockchase Research)
Green Brick Partners
GRBK-Q
PAST TOP PICK
Mar 18, 2025
Stock price when the opinion was issued
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GRBK is a mid cap home builder and land development company. It is growing nicely and priced well at 10X earnings.
It has economic/rate sensitivity but has been very profitable for the past decade. The balance sheet is OK.
Insiders own 7% and the stock has been doing very well.
Positives: growth, management, consistency, valuation.
Cons: recession risk, interest rate risk, cash flow variablility.
It looks good to us and is growing faster than a group of six Bloomberg peers.
We cannot provide personal weightings, but as a mid cap stock with economic sensitivity we would be cautious on a big position.
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Recently reported earnings for GRBK, a builder of new homes in the US southern states, showed all time record high quarterly home closings and EPS -- both increasing 25% over the year. It trades at 8x earnings, under 2x book and supports a 25% ROE. The company is prudently using cash reserves to retire debt and buy back shares. We recommend setting a stop-loss at $43, looking to achieve $74 -- upside potential of 19%. Yield 0%
(Analysts’ price target is $74.00)We reiterate GRBK, a land developer and homebuilder focused on the US southern states, as a TOP PICK. Analysts prefer that the company owns most of its land within a low-leveraged balance sheet. It trades at 7x earnings, 1.6x book and supports a 26% ROE. We continue to recommend holding a tight stop at $50, looking to achieve $70 -- upside potential of 23%. Yield 0%
(Analysts’ price target is $70.00)
Our PAST TOP PICK with GRBK is stagnating. To remain disciplined, we recommend trailing up the stop (from $43) to $50 at this time.