The Best Homebuilding Stock to Own This Month

PHM has a history of positive monthly returns in November

Deputy Editor
Nov 13, 2023 at 12:53 PM
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There's been plenty of speculation regarding homebuilding stocks as construction spending and mortgage rates jump. The grim outlook for existing homes has pushed buyers towards new constructions, and Pultegroup Inc (NYSE:PHM) is reaping the rewards, up 84.8% over the last 12 months. Though shares were last seen 0.4% lower at $82.04, there's reason to believe that PHM still has a solid path higher.

This is due to the fact that Pultegroup stock is halfway through a historically bullish month. per data from Senior Quantitative Analyst Rocky White, the equity is one of the best-performing stocks on the S&P 500 Index (SPX) when looking at the last 10 years. Securing second place on White's list, PHM averaged a November return of 7.2% in the last decade, finishing the month with a positive 100% of the time. The equity is already outperforming its historical gains, up 11.4% in November, with more than two weeks left in the month.

SPX Best of November 132023

On the charts, the stock just bounced from a late-October post-earnings dip. Now trading in a range between the $80 and $84 area, Pultegroup stock has neared its mid-August record highs just above the $86 level.

An unwinding of short-term options traders' pessimism could provide some tailwinds. This is per PHM's Schaeffer's put/call open interest ratio (SOIR) of 1.18 that ranks in the 74th percentile of readings from the past 12 months, suggesting a bearish bias amongst these traders.

 

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