Top Picks 2017: D.R. Horton
01/25/2017 6:00 am EST
Russ Kaplan is a leading money manager with a value-oriented and contrarian approach to very long-term investing; here's a look at his top growth idea for the coming year.
One of the few places of value in this market is the home building stocks and our Top Pick for growth-oriented investors is D. R. Horton (DHI), which is a home building stock.
D.R. Horton is more than just a homebuilder, however. Horton is involved in all aspects of the realty area. It also owns lots of property and is into title insurance.
Yes, mortgage rates have gone up, but that is already reflected in the price of the stock, which has fallen from $38 to a recent price is the $28 range. I can see it going back to $38 in the near future.
With a price/earnings ratio of 12, it is very undervalued from the market average, which is currently around 22.
There really is a D. R. Horton and he owns 7% of the company. This is not a stock for those looking for income. It only pays a little over 1%.
Editor Note: Last year, Russ Kaplan selected Freeport McMoran (FCX) as his Top Pick. The stock has since gained 116%. Russ now considers the stock a holding, saying, "Despite the sharp run up of Freeport McMoran this year, I would rate the stock as a solid hold. I would hold on to what we have, but not buy any more."