Lennar Corp. (LEN)

Housing is difficult, and there have been a couple of head fakes. Interest rates were expected to fall, but look where we are right now. Short term we'll probably see lower rates (and housing will benefit), but we'll have to see what happens longer term.

Used to own. Sold on its messy reorganization. Still likes both it and the space. Instead, he owns PHM and TPH.

Still deserves a full position, but investor's right not to get too greedy. Keep your eye on the impact of interest rates.

He'd strenuously argue that these are not buy-and-hold investments due to structural underbuilding in the US. Housing is extremely cyclical. These are, at best, a trade.

Even for a trade, look at it through the macro lens:  Is the economy accelerating? Is employment? Are interest rates going down? No clear picture right now. As well, structural headwind on housing demand because US is not as welcoming to migrants as it used to be.

It's clear there's a housing shortage in the US. He owns peers because he's bullish the homebuilders, but rate-cutting has been delayed to this year gross margins for the builders has been reset, and we've seen strength in this group in recent moves.

Owned this until the spring, when the company reorganized and spun off the piece that owned the land. Smart from a corporate standpoint, but ramifications were not clear from a Canadian tax perspective and can be costly. He still owns other homebuilders.

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

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.

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.

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.

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.

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.

Cash flow yield of 11% and strong technicals.