Homebuilders On the Move: Cramer Likes Toll (TOL)

On Mad Money last night, CNBC's Jim Cramer went bullish on a homebuilder...? Cramer was highlighting plays that could greatly benefit from the government's stimulus package when he called out Toll Brothers (NYSE: TOL), saying homebuilders will likely benefit from the higher conforming mortgage loan limit of $729,750, introduced with the stimulus plan, that will be supported by Fannie Mae, Freddie Mac and the FHA. Cramer said this assumption makes Toll Brothers a 'Buy'.

Shares of homebuilders have been on the move lately, benefiting from the Fed's 75 basis point cut and speculation that the government could bailout insurers such as MBIA (NYSE: MBI) and PMI (NYSE: PMI). Since the beginning of last week, the five largest homebuilders have experienced corrections, to say the least, in their stock prices: D.R. Horton (NYSE: DHI) has gone up more than 40%, Toll has risen 38%, Pulte Home (NYSE: PHM) is up 43%, NVR Inc. (NYSE: NVR) is up 24% and Centex (NYSE: CTX) has risen by about 39%.

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