Charles Bobrinskoy, Ariel Investments vice chairman, joins 'The Exchange' to discuss how investors can find value in housing and his likes in the sector and retail earnings expectations.

Charles Bobrinskoy, Vice Chairman of Ariel Investments, noted that value stocks have recently outperformed growth stocks, with particular opportunities in the housing sector. He pointed out that despite challenges such as high interest rates, tariffs, and labor costs, there remains underlying demand for home repair and remodeling, as many homeowners have built up equity and are investing in their properties.

Bobrinskoy highlighted specific companies, including Mohawk Industries, Generac, and Resideo Technologies, as examples of solid value plays in the current market. However, he expressed concern about the potential negative impact of tariffs on major retailers like Lowe's and Home Depot, warning that these companies may face increased costs and possible sticker shock for consumers as tariffs take effect.

Charles Bobrinskoy nervous about impact of tariffs on retail earnings

Value has been quietly outperforming growth this month. He says the shift is real. Joining me now, Charles Brubinskoy, Vice Chairman of Ariel Investments. It's good to see you today, Charlie. Okay, first of all, what do you make of the investments in D.R. Horton and Lenar? Because, you know, I was looking at the front page of the Wall Street Journal right before I came on. Nobody's buying homes, nobody's switching jobs. That's the headline. Yeah, I think it's clearly Buffett related here. Buffett thinks the market overall is pretty expensive. He's keeping an awful lot of cash, record amounts of cash. But the one area that he and we are seeing a fair amount of value is in housing. Normally, in a cyclical industry like housing, you have to buy it when earnings are down and the P.E. multiple's high. Right now, you're able to buy off low depressed earnings, but at a very low multiple. So if we get back to a normal housing environment, repair and remodel, we don't have to have everybody building new homes, just normal repair and remodel, there are a lot of housing stocks that look very attractive. How do you get back to normal repair and remodel with interest rates where they are, with the overhang of tariffs and what that can do to parts and materials? And then there's the issue of labor. I mean, anybody who's tried to get work done on their house, recently, is probably getting sticker shock with the prices that they're quoting you to come in and do the work. Yeah, so you said a lot there, but those are all good questions. But the point is that a lot of people have built up equity. The price of their home is up, but their carpeting is old. Maybe they wanna put in new hard surfaces. So they wanna invest in their home if they can't sell it. And so there should be a normal repair and remodel cycle here. There are other names like Generac, which build backup generators for home. As weather gets bad, people put in backup generator systems. So we think, you're absolutely right, labor is getting a little more expensive, but we just had some management teams in yesterday who said that that's not as big an issue as you would think. Most of the people in the construction industry do a good job of making sure their workers are here legally. So fundamentally, there's just a nice setup for building products. Okay, so when you're looking at the stocks that you like, we've got on here Mohawk Industries, it's down about half a percent today, but up year to date about 7%. You mentioned Generac. Resideo Technologies, I noticed this is on your list. This is a thermostat company that used to be Honeywell's? Right. Okay. So that's the old Honeywell thermostat business that was spun out by Honeywell. They had, the stock had gone nowhere for a long period of time because they had a big annual payment that they were making the Honeywell. They finally settled out and made a one-time payment. And so now earnings are gonna be much higher going forward. And frankly, the stock was just way too cheap. So the stock has now gone from mid-teens to 32 in about four months. And this is just another example of a good, maybe very good company, but this is not Nvidia. This is not spectacular growth, just solid company that's going off of low profits right now because of where we are in the housing cycle, yet trading at only 13 times earnings. Lowe's and Home Depot report earnings next week. Do you expect to see movement for them in their earnings reports? I am nervous about the impact on tariffs. This is the one thing that I would call out. The people, the big stores have been waiting to increase prices because they didn't wanna do it before they saw the actual tariffs. Now those actual tariffs are coming through and they're gonna be some sticker shock, I think, at Lowe's and Home Depot. I'm a little nervous and cautious about the impact of tariffs on retailers.

U.S. President Donald Trump and Russia's Vladimir Putin have arrived in Alaska ahead of their high stakes talks on Ukraine. The expected one-on-one meeting between Trump and Putin has expanded to include U.S. officials Steve Witkoff and Marco Rubio and other Russian officials.

Ukraine Invasion

Trump, Putin arrive in Alaska for historic summit

Israel's far-right finance minister approved the construction of a controversial new settlement in the West Bank, saying it "finally buries the idea of a Palestinian state." But it's unclear if this move will actually go through. Rights groups swiftly condemned the plan.

Jerusalem

Middle East Conflict

Israeli finance minister approves new West Bank settlement

U.S. President Donald Trump indicated in an interview that he hoped to push Russian President Vladimir Putin toward a second meeting but acknowledged there was a chance Friday’s meeting would not succeed.

Washington

Trump shifts tone, confident on deal to end Ukraine war

Israeli Finance Minister Bezalei Smotrich said a plan to add more than 3,000 homes to a controversial settlement in the West Bank would bury ‘the idea of a Palestinian state.’

Israel furthers plan for settlement that divides the West Bank

Ukrainian President Volodymyr Zelenskyy met with British Prime Minister Keir Starmer in London. This comes one day before U.S. President Donald Trump is set to meet with Russian President Vladimir Putin in Alaska to discuss a possible ceasefire in Ukraine.

London

Zelenskyy, Starmer meet ahead of Trump, Putin summit in Alaska

Speaking in the Oval Office on Thursday, President Trump sounded optimistic about his upcoming summit with Russian President Vladimir Putin in Alaska.

Trump says he thinks Putin and Zelenskyy will make peace

Florida Gov. Ron DeSantis has announced plans to build another immigrant detention center, dubbing it the "Deportation Depot." The facility will be in North Florida.

Jacksonville

DeSantis announces plan to build another immigrant detention center

President Trump had a virtual call Wednesday with Ukrainian President Volodymyr Zelenskyy ahead of his meeting with Russian President Vladimir Putin on Friday in Alaska. After the call, Zelenskyy said he told Mr. Trump that "Putin is bluffing."

Ukraine's Zelenskyy warns President Trump ahead of meeting with Putin

U.S. President Donald Trump said he would ask the Republican-controlled Congress to extend federal control of Washington's city police force beyond 30 days, escalating his campaign to exert presidential power over the nation's capital.

Trump wants to extend federal control over Washington police

With just hours left to reach a deal on plastics, negotiators in Geneva were scrambling to resolve a deadlock caused by “red lines” of member countries. Nations are crafting the first global, legally binding treaty on plastics pollution at the United Nations office in Switzerland.

Geneva

Global plastics treaty talks in Geneva stall as deadline looms

At least 123 people have been killed in 24 hours, according to Gaza's Health Ministry. Israeli Prime Minister Benjamin Netanyahu says people will be given the opportunity to leave Gaza before a planned ground offensive, but no one is being pushed out.

Israeli strikes pound Gaza ahead of planned ground offensive

America's NATO allies stood firmly with Ukrainian President Volodymyr Zelenskyy ahead of the face-to-face meeting between President Trump and Russian President Vladimir Putin in Alaska. The European leaders showed a united front that there should be no peace deal without Ukraine's involvement.

Kyiv

NATO allies stand with Ukraine ahead of Trump-Putin summit

U.S. Immigration and Customs Enforcement must improve conditions for detainees at New York's 26 Federal Plaza, a judge ruled Tuesday.

New York

Judge rules ICE must improve conditions for detainees at NY facility

National Guard troops arrived in Washington, D.C., following President Donald Trump's deployment and federalization of local police to crack down on crime in the nation's capital.

National Guard troops arrive in Washington, D.C.

U.S. President Donald Trump said that he had a "very good call" with Ukrainian President Volodymyr Zelenskyy, days before his scheduled Alaska meeting with Russian President Vladimir Putin.

Trump had 'very good call' with Zelenskyy ahead of Putin meeting

Israel's military chief of staff, Lt. Gen. Eyal Zamir, has approved the framework of a plan for a new offensive in Gaza. CBS News Middle East reporter Courtney Kealy has more details.

Israeli military chief approves 'framework' for new Gaza offensive

President Donald Trump said Wednesday there will be “very severe consequences” if Russian President Vladimir Putin doesn’t agree to stop the Ukraine war after Friday’s summit.

Trump warns of 'severe consequences' if Russia doesn't stop war

A Wisconsin woman on Tuesday was found guilty in the United Kingdom of trying to kill a man at point-blank range in 2019. Aimee Betro, 45, was part of a plot with two other co-conspirators to murder Sikander Ali, prosecutors said.

Birmingham

American woman found guilty of UK murder-for-hire plot

Record-high temperatures across Europe are fanning wildfires across the continent. Experts say a warming climate and an increase in flammable vegetation from rural depopulation are major factors.

Madrid

Historic heat fuels fires across Europe

Hungary's PM Viktor Orbán said the EU attempts to set conditions for a meeting to which leaders of the EU were not invited. He also called for an EU-Russia summit.

Brussels

EU leaders rally behind Ukraine ahead of Trump-Putin talks

President Trump said Monday he expects that Russia and Ukraine will "land swap" certain territories as part of an eventual ceasefire deal. Mr. Trump is set to meet with Russian President Vladimir Putin in Alaska on Friday.

Trump claims 'land swapping' between Russia, Ukraine will happen

Taylor Swift confirmed her 12th studio album, "The Life of a Showgirl," in a teaser for her upcoming appearance on her boyfriend Travis Kelce's podcast. Swift did not disclose the release date of the album.

Taylor Swift announces new album, 'The Life of a Showgirl'

U.S. President Donald Trump said that his planned meeting with Russian President Vladimir Putin in Alaska on Friday will be to "feel out" the leader as pressure mounts for Russia and Ukraine to make a peace deal.

Trump to meet with Putin in Alaska on Friday

A meeting between US President Donald Trump and Russian President Vladimir Putin is set to take place in Alaska, with European leaders notably excluded from the talks. Until Europe can defend itself, it's not likely to be invited to a great power dialogue, experts have told Euronews.

Alaska

Europe frozen out as U.S. and Russia prepare for Alaska talks

U.S. President Donald Trump said on Monday that Kyiv and Moscow will both have to cede land to end the war in Ukraine and talks with Russian President Vladimir Putin this week will instantly show whether the Kremlin leader is willing to make a deal.

Breakdown