The trend is for homebuilders and this 99-rated stock

Last September, Money & Markets chief analyst Matt Clarke wrote of an attractive homebuilder stock with a power rating in the green zone of 98 out of 100 and potential for seriously profits…

Based in Arlington, Texas, Forestar Group Inc. (NYSE: FOR) is a $1.4 billion company that develops and sells single-family lots to builders.

As of June 30, Forestar is developing communities in 52 markets in 20 states – including Texas, Florida, South Carolina, Georgia, North Carolina and Tennessee (states with some of the largest population growth).

Matt pointed out that despite high mortgage rates, the supply of available housing is still limited. So home buyers turned to new home construction to build their dream home instead.

As usual Matt’s analysis and timing was spot on…

Mortgage rates have fallen for 10 consecutive weeks.

And homebuilder stocks saw significant gains across the board in 2023:

FOR’s performance puts it right in the middle of the pack, with a 115% return over the past year and a 21% gain since Matt mentioned it in Daily capacity in stock last September.

Even better, after these rapid gains, FOR’s power ratings in the green zone have improved. It now sits at a truly impressive 99 out of 100:

FOR January 2024 green zone power estimates.

My system says FOR stock still has plenty of room to run from here.

But we also need to “zoom out” a bit and focus on what can become one of the biggest investment trends for 2024

The American dream is coming back

Home ownership has always been an integral part of the American Dream…

But the U.S. housing market just hasn’t been the same since the financial crisis and crash of 2008-2009.

During this boom, home builders worked their way up – with housing stock reaching unprecedented new highs. The ensuing backlash bankrupted many smaller construction companies, and the industry took years to recover.

Meanwhile, Americans struggled with a major recession… a global pandemic… and more two major banking crises.

Homeowners have spent more than a decade weathering one major financial hardship after another while waiting for home prices to rise enough to break even when selling.

That meant homeowners weren’t selling their homes and builders weren’t rushing to add more to the supply.

As a result, inventories have been declining year after year, hitting new low after new low:

As interest rates spiked in early 2022, the industry came to a virtual standstill.

Mortgage rates hit their highest levels in 20 years and both buyers and sellers put their plans on hold.

Now the Federal Reserve is easing — and opening the floodgates for new homebuyers.

The Mortgage Bankers Association expects total origination (also known as the amount of new money committed to mortgage loans) to reach $1.94 trillion in 2024, an increase of approximately $300 billion (with “b”) from last year.

There is simply no way the industry’s paltry supply of housing inventory can handle such a huge surge in demand.

This is where homebuilders like FOR step in…

Artificial intelligence confirms the trend

As you may already know, I have launched a new investment service called Infinite Impulse Warning last September.

It combines my Green Zone power ratings with AI, using AI-powered screening to identify the top 10 momentum stocks from over 8,000 listed securities.

I designed the system to refresh once a month, rotating stocks the same way you would pass the baton to a new runner in a relay race.

Infinite Impulse Warning is unique because it is almost completely automated and analytical. I designed the system, but there’s very little discretion — the AI ​​basically runs on its own!

And since I never taught him how to read The Wall Street Journal or watch CNBC, he is not influenced by the same financial media as us investor people.

As a result, he makes some bold investment decisions…

For example, the Infinite Momentum system has been uniquely fixated on homebuilders for the past few months.

There is no bias involved, the system is only targeting the best momentum investments for a given month. Yet no fewer than five different homebuilders have been chosen, with rapid returns of up to 25% in just two months.

This could to be a coincidence.

But it is also possible Infinite Impulse Warning does exactly what it was designed to do – identify one of the biggest trends for 2024 months before anyone else…

(For more information Infinite Impulse Warningincluding how you can get in before the next Portfolio Refresh Day on Friday January 12th, see my full presentation HERE.)

To good profits,

Adam O’Dell
Chief Investment Strategist

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