It takes an unusual combination of fundamentals and attitudes to create a stock opportunity appropriate for multiple investor types. Such is the case for homebuilders. Housing indicators are positive, results are good, growth is happening. At the same time, general views are negative, resulting from last year’s underperformance and this year’s misinterpretation of housing indicators (particularly existing and new home sales). Hence, growth, value and contrarian investors as well as speculators can find things to like about homebuilder stocks. (Income investors, not so much, unless you are willing to give weight to 10% earnings yields.)
During the fourth quarter 2018 bear market and, again, in this month's weak stock market, homebuilder stocks outperformed. However, the bear market outperformance was hidden because the stocks were basically flat, so investors maintained their negative view of the group.