The Panic-Proof Portfolio (Stockchase Research) Lennar Corp. LEN-N TOP PICK May 02, 2024

Is up today, likely from guidance from Toll Brothers. Are lots of tailwinds for homebuilders: falling interest rates and Kamala Harris' pledge in this scetor.

Cash flow yield of 11% and strong technicals.

They report Thursday. He expects the homebuilder to tell a terrific story. If the Fed cuts 50 basis points the day before, LEN could be a terrific place to be.

Economically sensitive, rate sensitive. If you have a 5-10 year horizon, US housing is still underbuilt. Still more valuation upside. Since 2008, all in the space have become higher quality and more of a manufacturing business.

It reports Wednesday. The housing stocks were hammered this weak about Toll Brothers reported a weak quarter and were downgraded. Also, mortgage rates remain stubbornly high.

Still holds. Last month brutal for homebuilders. Though interest rates drifting lower, clear that won't be going as low or as fast as the market first thought. So the interest-sensitives are being punished. Yet mortgages are going up, somewhat negative for homebuilders. 

Long US mortgages cause resale market to dry up, but will eventually force home buyers to homebuilders. He's looking closely to see if this is an opportunity to increase his holding in homebuilders.

Sold it for Canadian tax reasons. LEN spun off the part of the company that held the land, probably a good move, but he wasn't sure about the tax hit. He still likes the US homebuilders given the shortage of housing.

It reports Thursday. A tough call. They need interest rates to go down for a long while to see more business.