Housing Recovery Sends Investors Beyond Homebuilder Stocks

Thursday, 30 May 2013 07:50 AM

By Dan Weil

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The sudden boom in the housing market hasn't just raised investors' enthusiasm about homebuilders.

They're going for shares of companies manufacturing everything from appliances, to building materials, to pickup trucks, The Wall Street Journal reports. Investors also are seeking out real estate sales firms and home-improvement retailers.

Those stocks are available at lower multiples than homebuilders are, proponents say.

Editor's Note: The Final Turning Predicted for America. See Proof.

You certainly can't argue with the jump in home prices. The S&P/Case-Shiller home price index soared 10.9 percent in March from a year earlier, the biggest gain since April 2006.

And investors want to take advantage of that in every way they can.

"For years, we've seen no interest in families remodeling their kitchens, adding a new bedroom or putting a new deck out there," Ragen Stienke, a fund manager for Westwood Holdings Group, told The Journal.

Now, "we're looking for companies that will benefit from homeowners deciding that their home will be worth more in a year or two, so they want to invest in it."

He likes plumbing-supplies company Watts Water Technologies and backyard-deck-products manufacturer Trex, for example.

Many experts say the housing recovery has further room to ride.

"Other housing market data reported in recent weeks confirm these strong trends," David Blitzer, chairman of the S&P index committee, said in a statement.

"At the same time, the larger than usual share of multi-family housing, a large number of homes still in some stage of foreclosure and buying-to-rent by investors suggest that the housing recovery is not complete."

Editor's Note:
The Final Turning Predicted for America. See Proof.

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