Investor poll says Lendlease and Goodman pick of trending ASX real estate stocks

It’s undoubtedly been an exciting month for the S&P/ASX 200 Real Estate (XRE) Index…
 

 XRE Index vs XJO Index (one month)

Via Google

CoreLogic data for November shows houses are on the market longer across the nation, sales volumes have dropped, and dwelling approvals have fallen. And while it’s getting harder and harder to get into the housing market, some investors are seeing value in real estate stocks.

Recent Selfwealth investor data shows higher conviction in the ASX Real Estate subsector that any other sector.

Even though the average number of trades in the sector are lower than for stock market darlings like the bank-led Financials and mining-led Materials sectors, Selfwealth investor data shows that the ASX Real Estate sector is seeing strong interest.
 

Selfwealth ASX investor behaviour (October):

Via Selfwealth

“A key indicator of investor sentiment is the ratio at which they’re buying compared to selling,” says Robert Marfell of the investor platform Selfwealth.

“And for the Real Estate sector, our data shows the ratio of buys-to-sells is leagues above all others.”

Within the sector, two companies stand out, according to Selfwealth data – Lendlease Group (ASX:LLC) and Goodman Group (ASX:GMG).

Marfell notes that these companies are defying a trend.

“We looked at the top 10 companies in the ASX Real Estate Sector across 2023 to see what investors were buying.

“We found that investors bought increasing amounts of both Goodman Group and Lendlease from October to late November this year, far more than any other in the sector.”

Via Selfwealth

Lendlease made up 19.1% of all top 10 buys in Q3 and Q4 whilst Goodman accounted for 12.8% of all top 10 buys in the same period.

“The laggard in the sector was Vicinity Centres (ASX:VCX) which saw a sell-off for each quarter of 2023,” according to Marfell.
 

ASX Real Estate (12 months) best and worst

XRE Top 20

XRE Bottom 20

Smack-bang in the middle:

Via MarketIndex

Investor sentiment poll

“Selfwealth sentiment poll in the sector showed 44% of Selfwealth buyers of Lendlease believed the ‘stocks were undervalued’ while another 14% bought Lendlease ‘to align with a target portfolio’.

“The dominant reason for selling was ‘taking profits’, with 30% quoting this the reason for exiting the stocks,” said Marfell.

Selfwealth investors said their reasons for weighing into Goodman included ‘aligning with target portfolio’ (24.5%); ‘diversifying into the sector’ (20.9%); and ‘earnings potential looks good’(19.8%).
 

Goodman Group (ASX:GMG)

Via MarketIndex

Goodman Group (ASX:GMG) is a global integrated property group with operations throughout Australia, New Zealand, Asia, Europe, the United Kingdom, North America and Brazil.
 

Selfwealth all-time investor sentiment data: GMG

Lendlease (ASX:LLC)

Via MarketIndex

Lendlease Group is an international property and infrastructure group with operations in Australia, Asia, Europe and the Americas. LLC’s integrated business model comprises the operating segments of Development, Construction and Investments.
 

Selfwealth all-time investor sentiment: LLC

Via Selfwealth

“On a macro level the overall decline in buy activity for these 10 Real Estate stocks in 2023 compared to 2022 was 28.5%,” noted Marfell.

“What makes the Lendlease story notable is that shares are down 16% year-to-date, and the consistent rise in buy trades indicates Selfwealth investors are being greedy while others are fearful.”

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