Our basic investment philosophy is that fundamentals will eventually be reflected in stock prices.
We believe there is no virtue in being bullish or bearish per se, but in being right for the right reasons. What matters most at the end of the day is helping our clients make money and making the right call based on solid fundamental analysis supported by logic and data.
We travel constantly all over the country visiting hundreds of homebuilding communities every year and meet with industry executives, community sales people, land brokers, field management, real estate brokers, subcontractors, and other local industry experts who contribute to our research process. Our main goal is to provide clients unique reports, data and insights which give them an edge.
Since 2006 we have visited the top homebuilding markets and have written insightful market tour reports that provide an insight on current market conditions as well as a historical backdrop and what is likely to happen in the future. This helps clients understand which builder will outperform vs. who will underperform.
Given our unique perspective and wealth of data we collect, we are able to provide unique perspective and insights into what is going on in the housing market in real time.
We have successfully predicted every major inflection point in the housing cycle over the last 21 years and have helped clients invest with confidence and conviction by understanding key trends before they become well understood in the market place.
We track existing home sale data in most of the key US housing markets to forecast national stats each month: Sales, Prices, Inventories, Pending Home Sales, etc.
This helps clients trade around macro data points.
We have data sets going back 50 years where we track many macro data points that affect builders including:
Housing Market Index
Starts and Permits
Permits by MSA – Annual and Monthly stats
Existing Home Sales
Pending Home Sales
New Home Sales
Case Shiller Price Index
Macro Economic Indicators
Population and Demographic Trends
Employment and Unemployment by State
Since 2007 our community pricing database has tracked every public builder community and the base prices of every model type sold within each community. This helps clients understand pricing and geographic exposure and how it changes over time. This can be used to determine market share, price point served, and to see who is growing and changing prices the most.
Detailed Company Models – We keep detailed excel models on every company we cover that go back many years typically to the company’s IPO. They have historically helped us accurately forecast orders, revenues and EPS.
Earnings Previews – A week before each company reports earnings, we provide clients with a comprehensive earnings preview. This helps clients prepare with what to expect and how to position to profit once the earnings come out.
Earnings Analysis – After the earnings come out we follow up with a quick analysis of what happened to orders, margins, deliveries, prices, margins and EPS.
Conference Call Take-aways – Following the conference call, we follow up with additional insights that came out of the conference call and what clients can expect in the future.
Actionable Recommendations – We reassess our ratings every quarter. We provide clear actionable recommendations that historically have helped clients make money. An upgrade to BUY means Buy/cover. A downgrade to SELL means sell/short.
Proven Track Record - HRC has a longstanding track record of accurately forecasting orders, revenues and EPS, and the direction of the stocks we follow. We have a track record that is unmatched in the industry which can be provided upon request.
Proven Valuation Methodology – HRC has a proprietary approach to assessing fair value price targets. We set price targets and ranges to gauge upside. We use this disciplined approach to put BUY and SELL recommendations.
Our HB Mega Comp Table compares builders across various metrics across time. This goes back several decades.
This allows clients to quickly compare and contrast builders across any metric or ratio possible.
Ultimately we derive proprietary price targets and recommendations.
These give clients actionable ideas as well as upside vs. downside potential.
Homebuilders differentiate themselves and compete based on various factors. We can capitalize on the dispersion created by these differences to pick winners and losers.
Land strategy – long vs. short, own vs. option, develop vs. buy finished lots.
Geographic concentration – diversified nationwide vs. concentrated regionally.
Price point and Product type – entry level, move-up, luxury and active adult.
Design and Choice – cookie cutter “all included” specs vs. build to order “custom” production homes.
We look forward to help you get the edge on the housing market.