According to the All-in-One Screener, a Premium feature of GuruFocus, five homebuilder stocks that have outperformed the Standard & Poor’s 500 Index in 2021 yet are not highly overvalued based on the GF Value as of Tuesday are Tri Pointe Homes Inc. (TPH, Financial), D.R. Horton Inc. (DHI, Financial), NVR Inc. (NVR, Financial), Meritage Homes Corp. (MTH, Financial) and LGI Homes Inc. (LGIH, Financial).
The 20-city S&P/Case-Shiller National Home Price Index increased 18.4% in October, down from September’s 19.1% gain yet continued its rebound from pandemic lows in the prior year. Low mortgage rates, high housing demand and low supply fueled the strong increase in home prices.
As such, GuruFocus’ All-in-one Screener listed several homebuilder stocks that have outperformed the S&P 500 by at least 10% over the past year. Five homebuilder stocks have a price-to-GF Value ratio of less than 1.20, showing the stock is just modestly overvalued based on GuruFocus’ exclusive valuation method that considers historical multiples and internal adjustments for past performance and future growth estimates.
Tri Pointe Homes
Shares of Tri Pointe Homes (TPH, Financial) traded around $27.30, outperforming the S&P 500 by approximately 27.52% for the year. The stock is modestly overvalued based on Tuesday’s price-to-GF Value ratio of 1.13.
GuruFocus ranks the Irvine, California-based homebuilder’s profitability 7 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 and profit margins and returns that outperform more than 72% of global competitors.
Gurus with holdings in Tri Pointe include Ken Fisher (Trades, Portfolio)’s Fisher Investments and Jeremy Grantham (Trades, Portfolio)’s GMO.
D.R. Horton
Shares of D.R. Horton (DHI, Financial) traded around $106.78, outperforming the S&P 500 by approximately 25.95% for the year. The stock is modestly overvalued based on Tuesday’s price-to-GF Value ratio of 1.12.
GuruFocus ranks the Arlington, Texas-based company’s profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank and an operating margin that has increased approximately 10.30% per year on average over the past five years and outperforms more than 87% of global competitors.
Gurus with holdings in D.R. Horton include George Soros (Trades, Portfolio)’ Soros Fund Management and David Tepper (Trades, Portfolio)’s Appaloosa Management.
NVR
Shares of NVR (NVR, Financial) traded around $5,882.15, outperforming the S&P 500 by approximately 13.30% for the year. The stock is modestly overvalued based on Tuesday’s price-to-GF Value ratio of 1.19.
GuruFocus ranks the Reston, Virginia-based company’s profitability 9 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank, a high Piotroski F-score of 7 and an operating margin that has increased approximately 4.6% per year on average over the past five years and outperforms more than 85% of global competitors.
Meritage Homes
Shares of Meritage Homes (MTH, Financial) traded around $118.80, outperforming the S&P 500 by approximately 13.27% for the year. The stock is modestly overvalued based on Tuesday’s price-to-GF Value ratio of 1.18.
GuruFocus ranks the Scottsdale, Arizona-based homebuilder’s profitability 8 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank and an operating margin that has increased over 7% per year on average over the past five years and is outperforming more than 81% of global competitors.
LGI Homes
Shares of LGI Homes (LGIH, Financial) traded around $151.98, outperforming the S&P 500 benchmark by approximately 12.5% for the year. The stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 1.01.
GuruFocus ranks the Woodlands, Texas-based company’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 and an operating margin that has increased approximately 2.2% per year on average over the past five years and outperforms more than 86% of global competitors.
