Shares of Lennar Corporation (LEN) are racing higher Tuesday, coming within pennies of its 52-week high, after the Miami-based homebuilder beat on earnings per share and revenue estimates for the fiscal third quarter.
Lennar grew its gross margins year-over-year as well, TheStreet's Jim Cramer pointed out on CNBC's "Mad Dash" segment Tuesday morning. "Housing is so strong," he added, noting that even Sherwin Williams (SHW) has had strong data.
There's strong demand for homes, low interest rates for mortgages and low unemployment. "That's the recipe," he reasoned, "it's finally paying off." But why now? We've had low rates for years, low unemployment and demand for housing. Now, though, investors are starting to pour money into these stocks when they report good results, rather than ignore them.
Cramer argued that this isn't limited to just housing. Automakers are profitable and have reported record results in the not-too-distant past. Yet they trade with some of the lowest earnings-based valuations in the stock market.
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Just look at General Motors (GM) . The stock is hitting new 52-week highs and is trading at its highest price since the new company began publicly trading. Shares are up more than 15% over the past month. On Tuesday, September auto sales came in at 11.9%, better than the 8% that was expected.
Sherwin Williams is another. Shares are hitting new all-time highs Tuesday despite the company cutting guidance to account for the recent hurricane damage sustained in Texas, Florida and the Caribbean. The numbers seemed to be better than expected, though.
Management made a great acquisition of Valspar and continues to do incredibly well, Cramer said.
It's almost like investors are adopting the Warren Buffett view, he reasoned, explaining that there's progress and the economy isn't so bad. The operating environment will be longer lasting and investors are realizing that, he concluded.
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