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You Can Still Profit From Housing Stocks: Portfolio Manager

Tuesday, 25 May 2010 | 5:36 PM ET

A report showed that housing prices fell in March, despite hopes that the government tax credit would help lift the market. Can investors still profit from the weak housing market? Buck Horne, housing analyst at Raymond James, and Michael Cuggino, president and portfolio manager of Permanent Portfolio Funds, discussed their sector outlooks.

Time To Buy Homebuilders?
A look at housing stocks, with Michael Cuggino, Permanent Portfolio Funds and Buck Horne, Raymond James.

“We’re a little concerned about the direction prices are headed, given that these are lagging indicators before we even get to the tax credit peak, which was in April,” Horne told CNBC.

Horne expects the housing markets to be in the “doldrums” for at least a few more months before seeing some sustainability.

In the meantime, Cuggino said investors can still make money on the home builder stocks—but they must be patient.

“It’s best for long-term investors that have a stomach for volatility, that’s not looking for a pure upwards swing, but can bounce around for a bit and pick longer-term stocks,” he said.

“Housing prices should come back over the longer term,” he continued. “Home-building in the U.S. is far away from issues in Europe and Asia, and so for a U.S.-centric investor, it may be an area where you can start making some longer-term investments.”

Scorecard — What They Said:

  • Cuggino's Previous Appearance on CNBC (May 19, 2010)
  • Horne's Previous Appeearance on CNBC (Mar. 23, 2010)

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Market Views — Bull, Bear & Other:

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CNBC Data Pages:

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CNBC Slideshows:

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Top Homebuilder Stocks:

Pulte

DR Horton

KB Home

Lennar

Toll Brothers

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Disclosures:

No immediate information was available for Cuggino or Horne.

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Disclaimer

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