Toll Brothers Inc. (TOL)

On Wednesday we'll see US home sales data, which he feels remain strong, but there isn't enough supply. Toll and DHI (DR Horton) are buys here to capitalize on this shortage.

(A Top Pick June 15/16. Up 42%.) As with the banks, this is one that you Buy and be patient with. Home formations in the US have been below trend for years and years. People have to live somewhere and the homebuilders will do well over time.

He would want to be in the homebuilders for sure. The Trump administration is going to make this a very attractive place to go. If income tax rates are coming down, it is going to be terrific. He also feels millennials want a house, so the formation is going to happen.

The root of success for homebuilders is new orders and prices, the rest of it is kind of noise. This company is doing well.

(Top Pick Feb 17/15, Down 29.60%) A very high quality builder with a lot of land holdings. Housing starts are at record levels. Data points support a continued recovery in housing. Last year it was not as fast as people had hoped. This one is quite interesting unless the US goes into recession, which he does not see.

(Top Pick Feb 17/15, Down 9.97%) It is down on interest rate concerns. The home builder group in the US have been soft over the last couple of months. Results announced sounded very good to him. The outlook is very good over the next few years.

A home builder which operates at the very high end of the industry, building luxury homes. As the consumer does well in the US and as people have more confidence, they are going to buy more homes, and this is a great way to play domestic US consumer strength.

One of the luxury builders in US housing. They have pricing power and are still coming off the 2008 problem and are getting volume increases. They have secured about 8 years’ inventory of land. Household formations are running at about 1 million a year, and historically they have run at about 50% higher.

US homebuilder. Services the luxury high end of the market. After a muted year in the US housing market in 2014, he expects there will be an acceleration in housing starts in 2015/2016, and they are well positioned to take advantage of that. Because it services the high end of the market, there is less price sensitivity from its customers. A lot of exposure to California, US South and attractive markets. Not cheap, but looking at 2016 numbers it is trading at a PE of about 15X, which historically is not expensive.

Likes the housing sector in the US. Prefers the XHB-N ETF. Thinks they are early on in the housing recovery. It’s a great sector.

(Market Call Minute) Has been a strong performer through the recovery but not this year. Further recovery in US housing will make it go higher but increases in interest rates will make it go lower.