JPMorgan's (JPM) recent note on homebuilding substantiated our previous bullish thesis on this sector. Like JPM, Lennar Corp. (LEN), K.B. Home (KBH), and Pulte Group, Inc. (PHM) are our favorite picks in this sector. D.R. Horton (DHI) can also be a potential buy, although it is currently trading at relatively expensive valuations, with its forward P/E ratio of 20x.