Homebuilder stocks will continue to be hot as millennials enter an already tight housing market. Investors seeking to capitalize on the sector may want to start building a stake in conservatively run MDC Holdings (MDC), said Iman Brivanlou, portfolio manager for the TCW High Dividend Equities fund. Brivanlou said MDC’s CEO Larry Mizel saw the 2008 downturn early and built a strong balance sheet in advance which allowed the company to navigate the downturn much better than their peers. He added that MDC’s management was also a little slow to catch the upside during the recovery, but he appreciates a cautious management team in a cyclical sector. ‘The company weathered the downturn much better than its peers,’ said Brivanlou. ‘Part of that conservatism prevented Larry from getting back into the game as early as some of his competitors but we think the market overly punished MDC for that specific reason.’ The TCW High Dividend Equities fund is up 2.3% year-to-date, according to fund-tracker Morningstar. Shares of MDC Holdings are up 17% so far this year.
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