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Is it a Wise Choice to Invest in NVR?

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Diamond Hill Capital, an investment management firm, published its “Diamond Hill Small-Mid Cap Fund” first-quarter 2022 investor letter – a copy of which can be downloaded here. Amid a rocky market quarter overall, the portfolio’s negative returns still outpaced the Russell 2500 Index by a healthy margin in Q1. From current levels, equity market returns over the next five years are likely to be below historical averages. Try to take some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Diamond Hill Small-Mid Cap Fund mentioned NVR, Inc. (NYSE:NVR) and explained its insights for the company. Founded in 1980, NVR, Inc. (NYSE:NVR) is a Reston, Virginia-based home construction company with a $14.3 billion market capitalization. NVR, Inc. (NYSE:NVR) delivered a -26.16% return since the beginning of the year, while its 12-month returns are down by -9.49%. The stock closed at $4,363.02 per share on July 12, 2022. 

Here is what Diamond Hill Small-Mid Cap Fund has to say about NVR, Inc. (NYSE:NVR) in its Q1 2022 investor letter:

"Homebuilder NVR, along with other housing companies, was pressured in Q1 primarily on concerns that rising mortgage rates will dampen new home demand. We recognize the challenges presented by a rising interest rate environment in the near term. Longer term, the secular outlook on housing construction is positive, as there remains a material shortage of housing stock in the US. We also like NVR's approach in which it has an option on land rather than owning it outright, which exposes the company to less risk from falling land prices."


Our calculations show that NVR, Inc. (NYSE:NVR) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. NVR, Inc. (NYSE:NVR) was in 39 hedge fund portfolios at the end of the first quarter of 2022, compared to 35 funds in the previous quarter. NVR, Inc. (NYSE:NVR) delivered a 0.25% return in the past 3 months.

In April 2022, we also shared another hedge fund’s views on NVR, Inc. (NYSE:NVR) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.