Here’s some great news for investors, the housing market is finally starting to heat up. With positive coverage starting to trickle out, now is the opportunity to pick up shares of housing-related stocks while they are still undervalued. Bret Jensen gives his top three picks for an industry that is ready to start moving.
It is becoming fairly apparent to me that activity in the housing market is starting to pick up as of late, both in better home sales, as well as increased remodeling activity. You can see this is in robust results reported in the last week by the likes of Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW). A better housing environment also was apparent in the solid numbers being reported by the likes of Toll Brothers (NYSE: TOL) and Meritage Homes (NYSE: MTH). Monthly home sales and home price appreciation have also have shown some strength recently.
As the cold winter gives way to spring, the housing market seems poised to accelerate. The jobs market is as strong as it has been in over a decade, consumer confidence is surging and mortgage rates remain near historical lows. Even credit seems to be starting to loosen again. A better housing market is necessary if the domestic economy is going to hit the 3.6% GDP growth predicted for it in 2015 by the IMF. This is one of the major themes I am playing within my own portfolio. Here is a couple of those names that I believe should have a very solid 2015 as they ride an improving housing market.
Construction firm Tutor Perini (NYSE: TPC) is very cheap at current valuations. This Small Cap Gem has been on the move since mid-December after it settled some long standing litigation in Las Vegas and Boston, removing negative overhang from the stock.
The company gets about a third of its revenue from big residential construction projects including an eighty story condominium complex going up right behind my abode along Biscayne Bay here in downtown Miami. Tutor Perini gets more than a third of its revenue from federal, state and local government projects and despite talk about “austerityâ€, spending here is quite robust. The rest of Tutor’s revenue come from specialty construction and services.
