Bretton Capital Management, an investment management company, released “Bretton Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The market is experiencing a period of high returns, with two consecutive years of around 25% returns and 15 years of mid-teens returns, prompting investors to be cautious. The average stock market return is around 9-10% per year, historically, based on corporate earnings growth and dividends and buybacks. The 20 companies the fund owns are well-positioned and expected to perform well. Against this backdrop, in the fourth quarter, the fund returned -0.98% compared to 2.41% return for the S&P 500. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
In its fourth quarter 2024 investor letter, Bretton Fund emphasized stocks such as NVR, Inc. (NYSE:NVR). Headquartered in Reston, Virginia, NVR, Inc. (NYSE:NVR) is a home builder that operates through Homebuilding and Mortgage Banking segments. The one-month return of NVR, Inc. (NYSE:NVR) was -13.15%, and its shares lost 1.81% of their value over the last 52 weeks. On February 18, 2025, NVR, Inc. (NYSE:NVR) stock closed at $7,263.40 per share with a market capitalization of $20.946 billion.
Bretton Fund stated the following regarding NVR, Inc. (NYSE:NVR) in its Q4 2024 investor letter:
"Thirty-year traditional mortgage rates were over 6% for all of 2024, the highest they have been since the 2008 financial crisis, a sharp change from 2021 when they were below 3% for part of the year. Existing house sales hit their lowest levels since 1995, and new housing starts were down 4% from 2023. Lean times for the real estate industry.
NVR, Inc. (NYSE:NVR) seems to have not noticed these market trends. They sold 22,560 houses in 2024, 21,540 in low-interest-rate 2021, and 19,668 in pre-Covid 2019. They keep grinding away with their basic business model, and they keep driving their earnings and buying back stock. In 2019, NVR earned $221 per share; in 2024, selling only 15% more houses, they earned $507 per share. NVR stock gained 17% on the year."
NVR, Inc. (NYSE:NVR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held NVR, Inc. (NYSE:NVR) at the end of the third quarter which was 47 in the previous quarter. While we acknowledge the potential of NVR, Inc. (NYSE:NVR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article we discussed NVR, Inc. (NYSE:NVR) and shared the list of highest-priced stocks. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.