1 Stock That Could Soar Amid Rate Cuts

Five Point Holdings (NYSE: FPH) isn’t a homebuilder.

It’s a land developer.

This A-rated, Strong Buy company (according to our Zen Ratings system) plans, entitles, and sells huge master-planned communities across California to builders like Lennar (NYSE: LEN), which owns a large stake.

That means FPH doesn’t have to deal with supply chains, construction crews, or fluctuating commodity prices. 

No wonder it’s the best-rated name of the real estate development stocks we track.

And if you believe interest rate cuts are coming in the second half of 2025… FPH could be one of the most asymmetric real estate plays on the market. Before I share why, here’s a closer look at what assets the company owns. 

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What FPH Owns

FPH has a simple job: unlock value from some of the most desirable land in America.

Their land bank includes:

• Valencia: 15,000+ acres in LA County
• The San Francisco Shipyard & Candlestick: 800+ acres
• Great Park Neighborhoods in Irvine: 2,000+ acres

In other words: the company owns prime real estate in one of the most supply-constrained, high-demand markets in the US: California. Most of the entitlement work is done. The land is shovel-ready.

Timing the Trade 

Land is the first thing homebuilders cut when demand slows … and the first thing they scramble to secure when the market turns.

If rate cuts happen by late 2025, homebuilders will scramble to position for a rebound by buying up land. Builders and land developers are some of the most rate-sensitive assets in the stock market, because mortgage rates are currently nearly 7% … putting major pressure on prospective homebuyers.  

If rate cuts come and turn housing demand back on, FPH is the kind of asset the homebuilders will need: entitled, located in premium markets, and already prepped for large-scale development.

Rate cuts could unlock not just new land deals, but upward repricing of FPH’s core asset base.

In other words: if the market shifts and builders rush back in due to higher housing demand from rate cuts, FPH could swing from ignored to in-demand quickly.

FPH is B-rated in our system for Momentum, which compares stock performance relative to its sub-sector peers, how frequently shares are traded, and more. We think Momentum is a very important factor … but FPH is also much more than a Momentum trade. 

The stock trades at just 1.11x book value, and a P/E ratio of 4.5. 

Plus, it has a PEG ratio of 0.11x. PEG stands for P/E to Earnings Growth ratio. It factors in the company's forecasted earnings growth rate %, making it a better metric for valuing high growth companies.

PEG ratio = P/E ratio / Forecasted earnings growth rate %

In theory, a company with a PEG ratio of 1 is perfectly valued, while a lower ratio may indicate that a company is undervalued. 0.11x is very cheap.

So it should be no surprise that FPH scores a B for both our Value and Growth Component Grades, too:

To see how it scores across four other Component Grades, click here. 

Bottom Line

FPH is a deep-value land bank sitting on irreplaceable California real estate … potentially mispriced because of macro headwinds that could reverse by year-end.

If you're looking for a rate-cut-sensitive, real-asset-backed stock with asymmetric upside, FPH deserves a long look. You can add it to your watchlist here.

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