Housebuilding stocks are underpriced: these cheap FTSE 250 shares are my top picks

first_imgHousebuilding stocks are underpriced: these cheap FTSE 250 shares are my top picks “This Stock Could Be Like Buying Amazon in 1997” See all posts by Stuart Blair Image source: Getty Images. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Simply click below to discover how you can take advantage of this. Stuart Blair owns shares in Vistry Group and Bellway. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.center_img Enter Your Email Address Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Stuart Blair | Tuesday, 12th May, 2020 | More on: BWY VTY Our 6 ‘Best Buys Now’ Shares Housebuilding stocks have been significantly affected due to the coronavirus pandemic. This has led to building sites being shut down, dividends being cut, and estate agents closed. Nevertheless, with the construction sector restarting over the past couple of weeks, I believe housebuilding stocks now look drastically underpriced. This is despite housing demand remaining strong and large numbers of first-time buyers searching for cheap options.Even so, with some estimates predicting a 37% fall in housing sales for this year, the housing sector is still on perilous ground. This means that not all housebuilding stocks will recover as fully as others. For this reason, it is important to be discerning when choosing the best housebuilders.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…I believe that these two FTSE 250 companies are in the best position for the recovery.A five-star housebuilding stockThe first FTSE 250 company that stands out is Bellway (LSE: BWY). Bellway is the fourth largest housebuilding stock in the UK and has consistently received excellent consumer satisfaction. In fact, over 90% of its customers state that they would recommend it to a friend. This has resulted in a strong order book of approximately c.£1.6 billion. Consequently, the housebuilder is in an excellent position once housing sales start to increase again.Bellway also has a flawless balance sheet, which includes more cash than debt. This will ensure that Bellway is in a strong position to deal with the impacts of coronavirus and will be able to spend cash where necessary.A housebuilder with significant insider buyingAnother FTSE 250 housebuilder that is especially appealing is Vistry Group (LSE: VTY). Vistry (previously Bovis Homes) has been the worst affected housebuilding stock over the past couple of months, with a c.45% year-to-date drop.Although this may be worrying, this underperformance may be due to the acquisition of Linden Homes for c.£1.1 billion just before the crisis. This has led to worries over Vistry’s liquidity. Nevertheless, this acquisition has established Vistry as a leading housebuilder and this should result in benefits in the near future.One particular aspect that attracts me to Vistry stock is the amount of insider buying. Since the start of March, nearly 100,000 Vistry shares have been bought by seven different insiders. As Peter Lynch has said, “insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.” This insider buying is a strong sign of faith in the recent acquisition and the future of the company.The FTSE 250 housebuilder has also noted that traffic to its website has remained strong throughout the pandemic and this is “an indication of the continued underlying demand”. The recent £58 million deal to build 200 homes in Exeter is an example of the demand that still exists and how Vistry ought to profit from it.To conclude, I believe that these two cheap FTSE 250 housebuilding stocks offer excellent value and significant potential for the future. Whilst I can also see significant potential in other housebuilding stocks (such as Taylor Wimpey and Persimmon), I think that Bellway and Vistry are the two housebuilding stocks best placed for the recovery. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.last_img

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