Weather November With This Undefeated Construction Stock

Subscribers to Chart of the Week received this commentary on Sunday, October 26.

The year seems to be flying by, with the last week of October rapidly approaching. October has been a month filled with enough volatility to give any investor whiplash, though all three major indexes look positioned to eke out healthy monthly wins. There are several names worth keeping close to the belt going into November, as fall continues and 2025 wraps up.

One of our favorite monthly routines is getting a fresh batch of data from Schaeffer’s Senior Quantitative Analyst Rocky White. For November, the list of the 25 best S&P 500 Index (SPX) performers over the past 10 years showed stocks from a diverse range of industries. However, the construction sector made more appearances than any other, leaving a clear-cut answer to where bulls should be funneling their November bets.

Right off the bat, Builders FirstSource, Inc (NYSE:BLDR) takes the top spot, and not by a small margin. Over the past 10 years, the construction name has averaged a November return of 14.2%, finishing higher every time. For perspective, this return is almost double that of second place’s Ametek (AME), which averages an 8.6% gain for the month.

The next construction stock on the list is Pultegroup (PHM), coming in third with an average return of 7.7%. Lennox International (LII) and Masco (MAS) round out the four homebuilding names, meaning the sector takes up 16% of the 25 best names to own next month. An easy observation is that construction companies are putting in bulk orders for spring building during the slow season. In other words, low demand equals cheaper material costs, thus more bulk buying.

Circling back around to our top dog, Builders FirstSource stock has been attempting to recover from its June 2, two-year low of $102.60, and is now back above the breakeven mark for the quarter. The shares pulled back after seeing a surge capped at $150, though the $120 area swiftly returned a floor of support after acting as resistance during a summer rout.

The security also enjoyed a more than 1% lift after U.S. existing home sales for September showed an adjusted annual rate of 4.06 million units, or 1.5%, on Thursday, Oct. 23. While the government shutdown enters its second-longest in U.S. history, investors managed to get a taste of the first bout of economic data (in 24 days!) on Friday, when the consumer price index (CPI) came in lighter than expected. This left investors optimistic for future interest rate cuts in the final quarter of 2025. Albeit volatile, traders should be able to sit at least (semi-) comfortably with the homebuilding sector through November.