Brad Thomas
Founder & Lead Analyst of Wide Moat Research
Apartment REITs UDR, Centerspace and Mid-America Apartment Communities are buys as apartment demand stays resilient while new supply slows. With the American Dream of homeownership being delayed, renter demand holds up, and the massive AvalonBay and Equity Residential merger is significant for the sector. As Sam Zell understood, discomfort creates opportunity. x.comÂ
Ugly housing conditions provide the contrarian sentiment for a major homebuilder bull run over the next 12 months. Bears investing through the rearview mirror are going to be proven wrong. x.comÂ
Real estate is on the verge of a multi-year breakout as the unaffordable housing market that is crushing homebuilders fuels REITs. When people cannot afford to buy, they rent, and REITs collect. x.comÂ
REITs stay in the penalty box because a reaccelerating labor market rules out Fed cuts this year. Job openings jumped to 7.618M against a 7.295M forecast and a prior 6.887M, and with core inflation still hot, Warsh can't cut into that. Rate-sensitive sectors such as REITs, small caps and anything long-duration stay under pressure, while shorter-duration, cash-flow-positive value keeps working. x.com x.comÂ
Opendoor could make a nice short-term swing trade on retail hype if it breaks its downtrend, though its long-term fundamentals are unconvincing. Retail speculators may pour back in once it moves, and some may buy it by mistake around the OpenAI IPO, as happened with Virgin Galactic before SpaceX's IPO. Fundamentally, mortgage rates likely need a serious cut for the business to accelerate. x.com x.com x.com x.comÂ
CoStar Group looks too cheap for its growth, expanding margins and network-effect assets. Its unique data network and marketplaces have durable network effects, and it could lead in agentic real-estate tech, with Homes AI an early look. If earnings compound over 20% organically for three years, below consensus, a high-teens to 20x 2027 P/E is probably too cheap. Q1 EBITDA more than doubled on lower personnel costs and AI efficiencies, and residential should turn profitable in Q2. x.com x.com … Show more
Realty Income offers exposure to real estate, monthly income and long-term appreciation without having to become a landlord. x.comÂ
Homebuilders like D.R. Horton look ugly while rates weigh on them, and it is not time to buy yet. D.R. Horton may soon become an ugly long-term buy, but not yet. x.comÂ
Sherwin-Williams can earn much more as housing turnover normalizes, because its pricing power holds even while its biggest end market is broken. Paint Stores comps rose 4.2% in Q2 with existing home sales at a 4.06M pace, and FY26 EPS guidance rose to $11.80-12.20. A normal 5.3M year could add about $1.50-2 of EPS, or roughly $14 of earnings power, 24x at $330, with upside past $17 if input costs help. PPG's exit and Kelly Moore's liquidation leave it gaining pro share. x.com x.com x.com x.com … Show more
Rocket Companies is worth buying before the housing cycle turns, meaning the rate of deterioration shifts to a firm bottom and maybe improvement rather than a strong rebound. Housing is in an odd spot for a recovery call. Per investor institLPGP, Rocket is taking share, over-earning on its mortgage servicing book while it waits, and already cutting costs with AI, leaving its long-term earnings power far higher. x.com x.comÂ
Welltower's risk/reward looks poor at almost 70 times forward earnings, even though senior-housing demand is rising while supply is not. x.comÂ
