Investors with the biggest bets on U.S. home builders are generally responding to the industry’s slump by buying more shares rather than selling.
Fifteen of the largest institutional stockholders in Lennar Corp., the country’s biggest builder, collectively added a total of 23.2 million shares during the first quarter, according to data compiled by Bloomberg.
Fidelity Investments almost tripled its stake in the Miami-based company by buying 7.1 million shares, more than any other firm. Six others added at least 1 million shares, and just three reduced their holdings by that amount, as disclosed in reports filed with the Securities and Exchange Commission.
Lennar is no exception. At each of the eight largest U.S. builders by market value, the biggest outside investors on March 31 were net buyers in the first quarter. Overall, they purchased 59.6 million more shares than they sold. And more than twice as many buyers exceeded the million-share threshold as sellers.
The demand surfaced as the industry suffered the biggest loss of 130 industry groups in the Standard & Poor’s 500 index. The S&P 500 Homebuilding Index fell 20 percent in the quarter.
Two investment firms stand out because of their first-quarter purchases: Hotchkis & Wiley Capital Management, in Los Angeles, and Legg Mason Capital Management Inc., based in Baltimore.
Hotchkis & Wiley is Lennar’s largest outside investor. The firm bought 5.6 million Class A shares to increase its stake to 13.9 percent. It also holds 10.4 percent of the builder’s Class B shares, carrying 10 times as many votes as Class A.
The firm also raised stakes in the fourth-largest U.S. builder, Pulte Homes Inc.; the country’s biggest builder of luxury homes, Toll Brothers Inc.; and two smaller companies, Beazer Homes USA Inc. and Meritage Homes Corp.
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