Rob Stabile Tri Point Homes, |Inc TPH-N TOP PICK Oct 07, 2014

Trading at 8 times earnings with a good cash flow yield of 11%. The home builders group has strong orders and pricing. Labour and land costs hold them back, but are regional. There is a disconnect between demand and supply.

(A Top Pick Oct 18/16. Up 3%.) A relatively small homebuilder in a handful of states, primarily in the south west, and branded under a lot of different names. They also have some exposure to Texas. Thinks the whole group will move because household formation is still in a low trend. It has moved in the last 3 decades between 500,00 and 2.5 million units a year. Right now, it is just over 1 million. To keep up with population growth, 1.5 million has to be done. These builders are all very inexpensive, most trading below 10X earnings, and he thinks they have a 15%-18% growth metric in front of them. This is a good entry point.

Owns shares in small cap portfolio.
Company performing well counter intuitively to higher interest rates.
Much better managed companies than last real estate crash.
Dramatic need for new housing creating business opportunity. 
Excellent business for long term. 

He prefers Toll and Lennar, but TPH has a fine business plan and housing demand will continue to rise whatever the Fed does with rates.