Is NVR Inc. (NVR) A High-Flyer in Disguise?

Jose Karlo Mari Tottoc
·3 min read

Vltava Fund, a global equity investment firm, published its Q4 2020 Investor Letter – a copy of which can be downloaded here. Different topics were discussed in the letter namely, the 3 types of Inflation and its outlook, the Central Banks' dilemma, Project Zimbabwe, and the changes of the fund's portfolio. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.

Vltava Fund, in their Q4 2020 Investor Letter said that they were mesmerized to the unique business model of NVR, Inc. (NYSE: NVR) and as a result, they acquired a position in the company. NVR, Inc. is a home construction company that currently has a $16.6 billion market cap. For the past 3 months, NVR delivered a 6.66% return and settled at $4,485.91 per share at the closing of January 22nd.

Here is what Vltava has to say about NVR, Inc. in its 2020 Q4 investor letter:

"At the beginning of December, we bought shares in the American company NVR. It is another of those companies that for years we have been itching to buy. Its business is in residential construction. At first glance that may not sound all that attractive, but NVR has a rather unique business model that enables it to do business with relatively small capital requirements, as a result of which it achieves levels of returns on equity and on invested capital that most (profitable) technology firms can only dream of. In the case of NVR, moreover, we think that we can take advantage of a trend taking shape and that can play out for many years to come of people moving out of the centres of large cities to the suburbs and countryside."

Best Housing Homebuilder Stocks To Buy Now
Best Housing Homebuilder Stocks To Buy Now

Last December 2020, we published an article telling that NVR, Inc. (NYSE: NVR) was in 42 hedge fund portfolios, its all time high statistics. NVR delivered a decent 12.61% return in the past 12 months.

Our calculations showed that NVR, Inc. (NYSE: NVR) does not belong to the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website.

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Disclosure: None. This article is originally published at Insider Monkey.