"I think the data…we saw from Lennar is highly encouraging," he said after the company reported 16 cents in earnings per share, 1 cent below the analyst consensus. "You’re looking at a 20 percent increase in new orders, a 35 percent improvement in backlog. It's not just Lennar, but the entire sector is better positioned for a more profitable spring selling season."
Lennar "is our top pick in the space," he added. "It’s also the best idea for defensive-minded investors who want to make money with exposure to the housing market on a three- to five-year timeframe. It’s an extremely well-managed company with a differentiated operating strategy."
That strategy includes creating a private-equity subsidiary that is using $700 million in dedicated capital to buying distressed real estate. Wetenhall said the company should be "rewarded as opposed to punished for going in this direction," because it will give Lennar an additional source of revenue
Additional News: Lennar Fourth-Quarter Profit Falls, New Orders Rise
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Robert Wetenhall does not own Lennar shares, but RBC Capital makes a market in Lennar shares.