VALUE: After Hours (S08 E14): Where Value Investors Are Finding Cheap Stocks in 2026

During their recent episode, Taylor, Carlisle, and Chris Bloomstran discussed Where Value Investors Are Finding Cheap Stocks in 2026. Here’s an excerpt from the episode:

[Chris] Oh, like I said, we’re starting to get some money invested into the home building type world. I guess you’ll see tomorrow, we just bought position in builder supply. I still think Decker’s is pretty cheap.

Working through whether that’s a value trap, if you don’t know the company, they own Hoka and Ugg. They’re two primary brands. And Hoka’s doing three billion in revenues on running.

Their Swiss competitor’s doing three, as against Nike’s 30 billion of shoe revenue out of their 50 billion. So those two companies have taken pretty good money. And meaningful market share.

Ugg does two billion. It’s been around a long time. Stock traded above 200, like 250 a couple of years ago.

And our basis in it is not much over 80. It’s trading a little over 100 today, maybe 108, 109. But with a billion and a half of net cash on the balance sheet, we bought it at 12 times earnings.

So it’s pretty clear that the Hoka brand in North America is gonna slow. They’ve got a lot of room internationally. They do 40% of their business direct to consumer, which is much higher margin.

I like the management team a lot. But I’ve got price as a margin of safety. So maybe it’s trading at 14 times.

Margins will come down. They’ve got the highest margins in the athletic shoe industry. We’ve got some international investments that I won’t name specifically, because we don’t have to disclose them.

But trading at some Norwegian and Swiss companies, trading at kind of five, six times earnings. We’ve been trimming gold only because we’ve made so much money. The position sizes got very big.

And so when I buy something, I tend to force myself to sell it.

[Jake] So- When you say that, you mean the miners, right? Not the- The miners. Yeah.

[Tobias] Let’s talk about Bula for a little bit, because I think that, you don’t have to talk about Bula specifically, just the housing and construction is interesting at the moment, because the number of sales that are going through are lower now than they were in the 2008, 2009 global financial crisis. And there are a lot of theories why one is interest rates are too high, even though I think interest rates are sub the long run average. The other one is just, there’s a huge divide between buyers and sellers in the market.

There was a chart doing the rounds yesterday that showed that we’ve never had so few buyers. And I think there are twice the number of sellers. So, it moves around a fair bit.

But the idea is just that housing is as expensive as it’s been. Median house price relative to the median income is as expensive as it’s been in the data going back 50 years or something like that. So it seems like we need to have house prices come down pretty materially before buyers move back into that market.

And that has knock-on effects for all of the housing industry and so on. So there are a lot of housing and construction businesses that are not doing as well as they might be. Look better when the cycle ticks up a little bit.

What’s your thesis there?

Why Homebuilders, Builders FirstSource & Housing Stocks Could Rebound

[Chris] I think there’s a nuance to how the median housing price is calculated that distorts that perspective a bit. You’ve got this apparent huge rise in median household prices. But if you go back a handful of years when the mortgage rates were sub-three, two and five-eighths, two and three-quarters, everybody refinanced their mortgage.

And when mortgage rates crashed through six and spiked up to seven and eight, if you were in a two and three-quarter percent mortgage and your household income and assets were not at the upper 1% or top 5% of the population, you were not selling your house. You were not trading homes unless you moved and your house was not gonna sell unless you died because you’re not leaving that two and five-eighths mortgage. And so the transactions that have taken place nationally tend to be at higher home prices.

So that makes the median household price appear as though it’s moved up. And it did move up for inflation and lumber costs and construction costs and labour costs. So it is higher, but it’s not so much higher.

So you’re starting to see in the last three, four years, you’re starting to see the proportion of 30-year mortgages that are at 6% or higher start to move up because you do have activity, you relocate your job. There is transactions, there are transactions taking place in multifamily and in smaller homes, but it’s the preponderance of activity is in larger homes. To me, it’s interest rates.

At a level of rates somewhere south of six, which is about where you are now, at five or four, I think there’s an enormous amount of pent-up demand for homes. You don’t have much construction activity. So I think you’re probably gonna have somewhat of a shortage against all of the young generation that are living in their parents’ basements.

So they’re living below their lifestyle expectation of where they wanna live and where they wanna move, but they’re not going until the mortgage rate makes housing prices more accessible. And so I don’t know what it’s gonna take to get there. It’ll certainly get there in the next recession.

If you have a bad crisis or if you have another panic, the Fed, because they’ve shrunk the balance sheet from nine trillion to six and a half trillion, they have room to do at least another or multiple rounds of QE. And so I almost think the housing market and the construction market as a surrogate of that are pretty good recession hedges in that if things get really bad, my guess is you’re gonna see more real estate activity from the pent-up demand. And the prices of some of the very well-run home builders like an NVR or a Lenar have come in.

We want builder supply, think lumber yards, but with higher margin product that home builders like. So instead of stick build, they’ve got full truss systems and full siding systems and wall systems. It’s a very well-run company.

So I don’t know, but I can’t give you a timeline. I just know that the prices as the stocks have come down and down and down and down are starting to be pretty attractive. And time will be the enemy of making a bunch of money, but if the economy gets worse sooner than later, I think they become a similar hedge to bad times like a dollar general has historically been where you get trade downs from the middle class, but you also get an accelerated use of SNAP, which are food stamps.

And so I think in housing and construction, I think there’s a bit of a contra cyclicality to them because of what’s happened in the last five or six years with interest rates that make these things pretty attractive.

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VALUE: After Hours (S08 E14): Where Value Investors Are Finding Cheap Stocks in 2026

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