Toll Brothers, Inc. (NYSE:TOL) is included among the 10 Cash-Rich Stocks to Buy Now. JPMorgan Turns More Cautious on Toll Brothers’ (TOL) 2026 Growth Path Photo by Vitaly Taranov on Unsplash On December 12, JPMorgan lowered its price target on Toll Brothers, Inc. (NYSE:TOL) to $141 from $161 and kept an Overweight rating after the earnings report. In a research note, the analyst pointed to fiscal 2026 closings and gross margin guidance that came in below estimates. The firm trimmed its forecasts but mai ...

Core Viewpoint - Berkshire Hathaway has made significant investments in Lennar, increasing its stake to $910 million, indicating confidence in the housing market and Lennar's long-term potential [1][2] Company Overview - Lennar is recognized for its well-run operations and a unique land-light business model, which mitigates risks associated with land ownership during market fluctuations [7][9] - The company has successfully spun off its land assets to create Millrose Properties, a REIT that develops land into finished homesites, allowing Lennar to focus on core homebuilding operations [9][10] Financial Performance - Lennar's current market capitalization stands at $27 billion, with a gross margin of 17.91% and a dividend yield of 1.91% [7] Strategic Initiatives - The formation of Millrose Properties has reduced Lennar's land risk and opened new opportunities, including the acquisition of Rausch Coleman Homes, which expands its market presence [10] - The land-light strategy allows Lennar to allocate capital more efficiently, enhancing its growth potential and shareholder value over the long term [10][11]

Core Insights - US corporations are potentially underutilizing cash management strategies, with research indicating that a more dynamic cash allocation approach yields higher returns compared to static management [1][2]. Cash Management Trends - Cash allocations at US corporations have decreased by 50% since 2021, driven by higher interest rates leading firms to invest in higher-yielding Treasury bills [3]. - Median allocations to US Treasuries increased from 3% to 20% during the same period, indicating a shift towards prioritizing yield over idle cash [3]. Investment Recommendations - Morgan Stanley recommends focusing on companies with strong cash reserves, as these firms are better equipped to handle economic downturns [4]. - Free cash flow is highlighted as a significant advantage, allowing companies to fund growth, reduce debt, or support initiatives without heavy reliance on external financing [4]. Methodology for Stock Selection - The article utilized a stock screener to identify companies with a price-to-free-cash-flow ratio below 15 and a market capitalization of at least $10 billion, focusing on those with the highest trailing twelve-month operating cash flows [7]. - Hedge fund sentiment was also considered, as research shows that imitating top hedge fund stock picks can lead to market outperformance [8]. Company Highlights - **Toll Brothers, Inc. (NYSE:TOL)**: - Operating cash flow is reported at $1.1 billion, with 51 hedge fund holders [9]. - The company exceeded expectations in quarterly orders but provided lower full-year guidance for 2026 [11]. - CEO noted that the luxury market remains strong, with demand supported by a decline in mortgage rates [13]. - **DocuSign, Inc. (NASDAQ:DOCU)**: - Operating cash flow is also reported at $1.1 billion, with 60 hedge fund holders [15]. - The company experienced strong growth in Q3 2025, with revenue reaching $818 million, an 8% year-over-year increase [17]. - Free cash flow rose to $263 million, enabling a $215 million share repurchase, marking the largest quarterly buyback to date [17].

We recently published 9 Stocks Jim Cramer Talked About.  Lennar Corporation (NYSE:LEN) is one of the stocks on Jim Cramer talked about. Lennar Corporation (NYSE:LEN) is another major American homebuilder. The shares are down by 15% year-to-date and down by 10.6% since mid-December. On December 16th, Lennar Corporation (NYSE:LEN) reported its earnings for the fiscal year 2025 and the fourth quarter. Its $9.4 billion in revenue beat estimates of $9 billion, while $1.93 in EPS missed $2.21 in estimates. Foll ...

Core Viewpoint - Raymond James downgraded KB Home to Market Perform from Outperform due to disappointment with fourth-quarter 2025 results and increased near-term risks associated with a shift in the company's operating strategy [1] Group 1: Company Strategy - The downgrade reflects concerns over KB Home's return to a primarily build-to-order model while entry-level competitors are aggressively clearing speculative inventory through mortgage rate buydowns [2] - Some customers may appreciate the simplified sales process and focus on personalization for build-to-order homes, which can still be delivered within approximately 120 days [2] Group 2: Competitive Landscape - Analysts express concern that KB Home may be at a competitive disadvantage as rivals are increasingly willing to offer financing incentives that lower monthly payments, preserve margins, and accelerate inventory turnover [3] - In the current market, affordability has become the dominant purchasing criterion for buyers, which may further impact KB Home's competitive positioning [3]

Want more housing market stories from Lance Lambert’s ResiClub in your inbox? Subscribe to the ResiClub newsletter. Most Read from Fast Company There’s no doubt about it: Housing market softening across the Sunbelt—the epicenter of U.S. homebuilding—has caused homebuilders to lose pricing power over the past year. Amid the additional margin compression, some giant homebuilders are adjusting their strategies. Lennar is finally easing up a little on its market share, taking volume-over-margin strategy, w ...

Core Insights - Lennar Corporation experienced a significant decline in short interest, with a reduction of 67.8% from 35,737,570 shares on November 30 to 11,521,372 shares by December 15 [2] - The company reported quarterly earnings of $2.03 per share, missing the consensus estimate of $2.30 by $0.27, while revenue was $9.37 billion, exceeding the estimate of $9.17 billion [4] - Lennar declared a quarterly dividend of $0.50 per share, resulting in an annualized dividend of $2.00 and a yield of 1.9% [5] Stock Performance - Shares of Lennar opened at $105.00, with a market capitalization of $26.78 billion, a PE ratio of 13.14, and a beta of 1.38 [3] - The stock has a 50-day moving average of $121.80 and a 200-day moving average of $121.55, with a 1-year low of $98.42 and a 1-year high of $144.24 [3] Institutional Holdings - Several hedge funds increased their stakes in Lennar, with The Manufacturers Life Insurance Company growing its position by 45.4% to own 8,894,125 shares valued at $1.02 billion [7] - Institutional investors own 81.10% of Lennar's stock, indicating strong institutional interest [7] Analyst Ratings - Analyst ratings for Lennar vary, with one analyst giving a Strong Buy rating, three a Buy rating, eight a Hold rating, and seven a Sell rating [9] - Bank of America set a target price of $95.00, down from $125.00, while UBS Group lowered their price objective from $161.00 to $137.00 [8]

Industry Overview - The housing market is struggling as high mortgage rates deter potential buyers, leading sellers to refrain from lowering asking prices [1] - Additional challenges include aggressive immigration enforcement affecting the construction labor force and high tariffs on building materials like lumber, aluminum, and steel [1] Company Analysis: Lennar Corp. - Lennar reported a nearly 6% year-over-year revenue decline in Q4 2025, with shrinking margins [3][4] - Gross margins fell to 17% in Q4, with expectations of further declines to 15-16% in Q1 2026 [4] - The company projects full-year 2026 deliveries of approximately 85,000, significantly below market expectations [4] - LEN shares have dropped over 20% year-to-date, with bearish indicators suggesting further downside [5] Company Analysis: Meritage Homes Corp. - Meritage Homes, with a market cap of $4.6 billion, reported a Q3 2025 revenue of $1.4 billion, missing estimates by over 6% [6][7] - Margins fell from 21.4% to 20.1% in Q3, and the company's spec business model may lead to increased liabilities in a slowing market [7] - Despite a brief share price increase, MTH shares have since declined, indicating collapsing momentum [9] Company Analysis: D.R. Horton - D.R. Horton, with a market cap of $42.5 billion, reported a revenue decline of only 3% year-over-year, outperforming many competitors [11] - The entry-level housing market remains stagnant, with many potential buyers unable to make down payments or unwilling to move from low-rate mortgages [13] - The company's fiscal Q4 2025 margin dropped to 20%, and the stock has decreased by 15% since early December [13][14] Company Analysis: NVR Inc. - NVR operates an asset-light business model and has seen a revenue decline of 4.5% year-over-year in Q3 2025 [16][18] - Although NVR shares are down only 10% year-to-date, bearish momentum is building, with technical indicators suggesting a potential dip [18] Company Analysis: Tri Pointe Homes Inc. - Tri Pointe focuses on high-net-worth areas but faces challenges as high mortgage rates prevent homeowners from moving up [19][20] - Despite beating recent earnings projections, revenue is declining year-over-year, and management has lowered margin guidance [21]

NVR, Inc. (NVR) ranks among the premier U.S. homebuilders, excelling in the design, construction, and marketing of single-family detached homes, townhomes, and condominiums, predominantly through a pre-sold delivery model. Operating nationwide under distinct brands like Ryan Homes and NVHomes, the company emphasizes streamlined operations, economies of scale, and exceptional customer satisfaction to drive growth. Headquartered in Reston, Virginia and with a market capitalization of $21 billion, NVR mainta ...

Core Insights - The Meridian Hedged Equity Fund reported a return of 1.67% in Q3 2025, underperforming the S&P 500 Index which returned 8.13% and the CBOE S&P 500 BuyWrite Index which returned 3.53% [1] Company Analysis: D.R. Horton, Inc. (NYSE:DHI) - D.R. Horton, Inc. is the largest homebuilder in the U.S. by volume, focusing on entry-level and first-time buyer segments [3] - The company reported a one-month return of -6.51% and a 52-week gain of 2.42%, with shares closing at $144.47 and a market capitalization of $42.194 billion on December 23, 2025 [2] - D.R. Horton demonstrated strong operational efficiency, with better-than-expected home closings and new orders, resilient gross margins, and a 2% year-over-year decline in construction costs [3] - The company raised its share repurchase guidance, indicating confidence in future cash flows [3] - Despite its potential, D.R. Horton is not among the top 30 most popular stocks among hedge funds, with 61 hedge fund portfolios holding its stock at the end of Q3, down from 64 in the previous quarter [4]