Jim Cramer on D.R. Horton: "Wall Street Simply Got Too Negative on This Group"

D.R. Horton, Inc. (NYSE:DHI) is one of the stocks that Jim Cramer looked at. During the episode, Cramer discussed the stock in light of the “roaring” comeback by homebuilders. He said:

“After struggling for the better part of a year, the home builders came roaring back today, led by D.R. Horton, the largest home builder in America… At the end of the day, this is a space most investors have been down on very long time. And you know, may still be true despite the group’s modest recovery from the lows over the past few months.

But these results tell us that home building business just isn’t that bad right now, especially when these builders are proactive, reading the market realistically, and offering incentives where needed to keep up their sales volume. So I think that the nascent comeback for the builders can continue, at least for the time being. Although eventually, this will come down to whether or not the Federal Reserve decides to start cutting interest rates again.

But the bottom line: The housing market, while not perfect, is a little more solid than we thought. Expectations are so low for the builders, solid results are enough to allow these stocks to soar like they did today. Wall Street simply got too negative on this group, which is how you get these explosive rallies in D.R. Horton… that spill over into… the rest of the industry. And hey, if you believe we’ve got tariff-induced inflation under control and the Fed will feel comfortable cutting rates sometime relatively soon, then the home builders could have a lot more room to run.”

D.R. Horton (NYSE:DHI) builds and sells single-family and attached homes, provides mortgage and title services, and develops rental properties and residential lots. The company also owns non-residential real estate and primarily serves homebuyers.

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