Big upside likely in real estate stocks: Pros

Real estate stocks could offer the next leg up for the market, Triogem Asset Management's Tim Seymour said Tuesday.

Looking forward to spring, the industry's busy season in the United States, real estate plays could do well on the back of lower unemployment, even despite wage growth, he said.

"I like Beazer," Seymour said. "I think the small-cap housing space is a better place to play."

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Seymour also said that he liked Cemex.

"This is where, if you listen to these guys, they're seeing incremental demand," he added. "This is a stock I'm long, a stock I'd stay long."

Real estate was recently added as the 11th sector in the S&P 500.

On CNBC's "Fast Money," Stuart Frankel's Steve Grasso said that he liked D.R. Horton and KB Home.

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As for pickup-truck sales as a leading indicator for builders and the GDP, that trade had run out of steam, he added.

"I think that trade is done," Grasso said, alluding to Ford's new F-150 pickup. "I don't know a real man that wants to drive an aluminum truck. I would drive it, but not a real man."

People walk by a sign in front of a Home Depot store in El Cerrito, Calif.
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People walk by a sign in front of a Home Depot store in El Cerrito, Calif.

Home Depot, however, up 19 percent year to date, was still attractive, he added.

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"I think that one's got a little juice left, too," Grasso said.

Private Advisor Group's Guy Adami warned on PulteGroup, whose stock is approaching its March highs.

"I'd be careful," he said. "If you've enjoyed this move to the upside in PHM, I'd be inclined to take profits. If you want to buy the breakout, do it above $22."

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In the home improvement space, Adami noted a sentiment shift.

"I think if you want to trade the two—Home Depot, Lowe's—now's the time to sell Home Depot, buy Lowe's," he said.

Karen Finerman of Metropolitan Capital Advisors saw a tell in the carmaker stocks.

"The auto space has come back so far, so quickly to prepeak levels, and we are nowhere near even remotely close to that in the housing space," she said. "So, that is interesting to me as a much more macro theme."