Sector Watch: Homebuilding and Construction, Gurus Active on 52-Week Lows

According to Reuters, the Pending Home Sales Index for July
decreased 1.3% as higher mortgage interest rates slowed the market.
The National Association of Realtors cited that while pending home
sales declined 1.3% for the month of July, sales were 6.7% higher
than last year’s levels. While the media presents relative ways to
measure a housing shortage or a surplus of inventory, one thing is
clear, the billionaires are active in this sector.

One month ago, only two homebuilding stocks were on a 52-week low;
now there are nine out 34 companies, according to the GuruFocus
Value Screen for finding
52-Week Lows

. The low ratio is 0.26.

Here’s a look at four residential construction companies, and the
billionaires who hold them.

Industry Sector: Homebuilding and Construction

Highlight: Gafisa S.A. (
GFA

)

The current GFA share price is $2.36, or 55.0% off the 52-week high
of $5.24.

Down 42% over 12 months, Gafisa S.A. has a market cap of $519.9
million, and trades with a P/B of 0.50.

Company: Gafisa S.A. is a homebuilder in Brazil. The company’s core
business is the development of residential buildings in 94
municipalities. The company is also engaged in the development of
land subdivisions, also known as residential communities and
entry-level houses. Gafisa S.A. also provides construction services
to third parties.

Guru Action:

As of June 30, 2013, the top Guru owner is currently
Steven Cohen

who made a new buy of 14,827 shares at an average price of $3.64
for a loss of 34.3%. Cohen has bought and sold GFA several times;
his five year trading history shows a red streak of double-digit
losses.

Jim Simons

sold out as of the second quarter, unloading 536,200 shares at an
average price of $3.64, also for a loss of 34.3%. His trading
pattern is very similar to Cohen’s over the past five years.

Track share pricing:


Highlight: M/I Homes Inc. (
MHO

)

The current MHO share price is $18.54, or 36.2% off the 52-week
high of $29.07.

Up 0% over 12 months, M/I Homes Inc. has a market cap of $470.35
million, and trades at a P/E of 19.20 and a P/B of 1.40.

Company: M/I Homes Inc. was incorporated in 1973. The company and
its subsidiaries build and sell single-family homes, attached
townhomes and condominiums to first-time, move-up, empty-nester and
luxury buyers. The company’s homes are marketed and sold under the
trade names M/I Homes and Showcase Homes.

Guru Action:

As of June 30, 2013, the top Guru owner is Donald Smith with
468,238 shares after reducing his position by 20.38%. Smith has
averaged a gain of 95% on 1,856,523 shares bought at an average
price of $9.92.

His MHO holding history:

Paul Tudor Jones holds 17,100 shares after increasing his position
by 14%. He has averaged a loss of 23% on 17,100 shares bought at an
average price of $25.20.

Bruce Kovner and Arnold Schneider sold out as of the end of second
quarter, both losing 20.5%. Check out their MHO trade details.

Tracking share pricing:

Highlight: D.R. Horton Inc. (
DHI

) – Yield 0.40%

The current DHI share price is $17.93, or 35.4% off the 52-week
high of $27.75.

Down 6% over 12 months, D.R. Horton Inc. has a market cap of $5.79
billion, and trades at a P/E of 14.60 and a P/B of 1.50.

Company: Starting in 1978, D.R. Horton Inc. is a homebuilder. The
company constructs and sells homes through its operating divisions
in the U.S., in 26 states and 77 metropolitan markets, mainly under
the name of “D.R. Horton, America’s Builder.”

Guru Action:

As of June 30, 2013, the top Guru owner is Ken Heebner with
8,660,000 shares after he increased his position by 42.32%. Heebner
first bought in the first quarter of 2012 and gained 23.9% on
6,600,000 shares bought at an average price of $14.47. He has
averaged a gain of 3% on 11,965,000 shares bought at an average
price of $17.33.

Andreas Halvorsen made a new buy of 622,000 shares in the second
quarter, as did Steven Cohen for 49,951 shares.

Louis Moore Bacon sold out his DHI at the end of second quarter
2013.

Check out all seven Gurus holding DHI.

Track share pricing:

Highlight: M.D.C. Holdings Inc. (
MDC

) – Yield 1.80%

The current MDC share price is $27.74, or 34.6% off the 52-week
high of $42.41.

Down 20% over 12 months, M.D.C. Holdings Inc. has a market cap of
$1.36 billion, and trades at a P/E of 4.60 and a P/B of 1.30.

Company: M.D.C. Holdings Inc. (
MDC

) was incorporated in Colorado in 1972, operating in both
homebuilding and financial services. Its homebuilding operations
consist of wholly-owned subsidiary companies that generally
purchase finished lots for the construction and sale of
single-family detached homes to first-time and first-time move-up
homebuyers under the name ‘Richmond American Homes.’

Guru Action:

As of June 30, 2013, the top Guru stakeholder is new buyer John
Keeley with 602,000 shares; Jim Simons is second with 427,866
shares after reducing his position by 30.06%; Chuck Royce is third
with 305,850 shares after increasing his position by 62.38%.

John Buckingham and Paul Tudor Jones also hold shares for 190,032
and 24,000, respectively. Gurus Steven Cohen and Arnold Van Den
Berg sold out as of the second quarter of 2013.

Check out their

MDC trading histories

here.

Track share pricing:


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