You Can Still Profit From Housing Stocks: Portfolio Manager

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.

“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)

Market Views — Bull, Bear & Other:

CNBC Data Pages:

CNBC Slideshows:


Top Homebuilder Stocks:


DR Horton

KB Home


Toll Brothers


No immediate information was available for Cuggino or Horne.