North Virginia Ryan (NVR)

The Long Term Investor needs the vision to look past current market troubles and see what companies will survive and thrive. That said the homebuilders are amid a slow and seemingly bottomless decline. For an investor with guts and nerves of steel this is a great time to find the best of breed and prepare to buy.

TLTI has stepped up to the homebuilder plate with its lone suggestion: North Virginia Ryan (NVR). This homebuilder is unique because even during the housing boom, it stuck with its low risk strategy which includes controlling land via option contracts, and only building homes to suit. These strategies kept balance sheets trim, debt low, and risk minimal. NVR is now poised for the strongest return when compared to its inventory and debt heavy competitors. It was the only public home builder to actually have more cash than debt. It is that cash that allows NVR to repurchase its shares even in this economic climate. Since 1997, NVR has reduced shares outstanding from 11.1 million to 5.5 million shares. Even this July, NVR repurchased $300 million worth of stock. Buybacks during the lean times should be a sign that NVR has the shareholders interest in hand.

NVR is continuing to drop, creating new 52 weeks lows on a regular basis. Citi Group upgraded the entire sector today (10/1/07). Your best bet is to keep an eye on this chart and look for a quite, flattened, low point. The threat of US recession will damage this domestic company. It will get cheaper. Some analysts already have a buy rating but there is no rush. For advanced investors: buy this stock and collect fees by allowing others to short sell this stock; it has a huge short-seller following. Talk to a broker for more advice on this strategy.

Here is a breakdown of regional segments:

FoxRidge Homes (Nashville, TN)

NVHomes (MD, VA, NJ, PA, WV)

Ryan Homes (NY, DE, OH, VA, MD, MI, NC, SC, PA, NJ, TN, WV)

Rymarc Homes (Columbia, SC)

Approximately 37% of its home settlements during the year ended December 31, 2006, occurred in the Washington, D.C. and Baltimore, Maryland metropolitan areas, which accounted for 52% of its homebuilding revenues in 2006. D.C. area tends to hold up long-term because of government based economy.