5 Housing Stocks for a Rebound

Look Beyond Lowe’s and Home Depot for Value

You wouldn’t know it to read the headlines, but the bottom of the housing crisis appears imminent, and that means opportunity
for savvy investors.

Let’s look at the indicators. On Monday, Lowe’s (LOW) reported results that beat
expectations. Although profits slid by 22%, the company earned 32 cents per share, besting analyst expectations of 25 cents per
share. Shares of LOW went higher on the news.

Home Depot (HD) followed on Tuesday with earnings that also beat expectations.
But unlike LOW, shares of HD fell on the news. It seems investors were reacting to worse-than-expected housing start numbers released
the same day.

But on closer inspection, the housing start numbers actually showed signs of improvement. Only the multifamily segment was down.
Single family housing starts actually improved slightly.

To me, this is a sign the housing sector is starting to turnaround. Now, many investors are expecting long beaten-down stocks
like LOW and HD to rally in advance of the improvement in this sector.

It’s not a bad strategy. But I prefer to turn my attention away from the big box retailers. There are other companies that stand
to profit from a housing sector turnaround.

Here are five of my favorite stocks…

NEXT: Stock #1: U.S. Home Systems (USHS)