BCV Bulletin - Recent Trading Activity - August 2024
SELL: D.R. Horton, Inc. (NYSE: DHI)
BCV has made the decision to reduce our position in D.R. Horton, Inc. (DHI). DHI is the largest homebuilder based in the United States. They also provide rental operations, residential lot development, and financial services. DHI has been an attractive holding for investors over the last two years, returning 127%*. Despite supply chain challenges, labour inflation, and macroeconomic headwinds, including mortgage rates topping 7% nation-wide in the United States, DHI was able to consolidate and grow market share. DHI’s scale, inventory lot position, and higher use of incentives provided to first-time homebuyers led to significant volume gains. While we continue to like DHI given its pristine balance sheet, capital discipline, and execution track record, we are crystalizing some of our gains in DHI to add to a security with a more compelling risk/reward profile.
BUY: Alphabet Inc. (NASDAQ: GOOGL)
BCV is using the proceeds of the above sell to add to our Alphabet Inc. (GOOGL) position in client portfolios. Given the technology sell-off in the market over the past month, we believe that shares of Alphabet continue to look increasingly attractive at these price levels. After digesting the specifics from Alphabet’s latest quarterly report on July 23rd, 2024, the business has proven that it can weather macroeconomic uncertainties and focus on growing their core asset base. Some highlights from their latest quarter include 29% growth in their cloud segment, as well as 14% growth in their internet search business: Google. We believe that the recent technology sell-off is more a reflection of broader market factors, rather than specific criteria related to the competitive position of the company itself. Alphabet continues to be at the forefront of the next technological revolution, making substantial investments in Cloud Computing as well as Artificial Intelligence tools to enhance its competitive position. As a result, we believe current market conditions provide an attractive opportunity to add to this position.
*Source: FactSetThis BCV Bulletin is intended for residents of the provinces and territories in which we are registered, is not meant to be a solicitation to any persons not resident in those jurisdictions and does not constitute an offer to buy or sell our products or services. Any opinions expressed are just that and are subject to change. Information is provided on a best-effort basis and its accuracy cannot be guaranteed. Information may also be provided from third party sources which are believed to be reliable, but we do not guarantee its accuracy or completeness. Certain statements may contain forward-looking statements, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. This BCV Bulletin has been prepared for general informational purposes only, is not intended as investment and/or financial advice on any subject matter and the securities mentioned should not be construed as a recommendation for any specific securities. ©BCV Asset Management Inc. 2024.
