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D1 Capital’s Q2 2025 New Buys: Betting on Housing Cycles, Building Materials, and Industrial Flow
For most of 2025, the Fed’s “high for longer” rate stance has kept the cost of capital elevated, putting pressure on rate-sensitive sectors like housing and manufacturing. But with market consensus shifting toward gradual rate cuts later this year, Dan Sundheim’s D1 Capital just revealed a compact but pointed set of new Q2 2025 positions that signal where he sees the next pockets of upside.
1. Housing Cycle Rebound Plays
D1’s largest new buy was D.R. Horton (DHI) — 1.54M shares worth nearly $200M. As America’s largest homebuilder, DHI stands to benefit from both falling mortgage rates and a structural housing shortage. A shift from 7%+ mortgage rates toward the mid-6% range could reignite demand, especially with builders able to offer rate buydowns and flexible inventory management.
2. Materials With Operating Leverage
Louisiana-Pacific (LPX) — 1.81M shares — gives D1 leverage to new housing starts through oriented strand board (OSB) and siding products. This is a cyclical bet with a kicker: if rates drop, building activity jumps, and LPX’s pricing power and mill utilization can expand sharply.
3. Industrial Flow Control
Flowserve (FLS) — 1.69M shares — positions D1 for growth in energy, water, and industrial process infrastructure. Flowserve’s pump and valve systems are embedded in long-lived capital projects, and the backlog could benefit from both U.S. infrastructure funding and global industrial capex recovery. I primarily view this new position as a pure industrial play that benefits from the prospects of declining rates.
4. Discretionary Upside in Leisure
Viking Holdings (VIK) — 1.15M shares — is a new cruise and leisure play. While not a traditional D1 core sector, it’s a calculated consumer discretionary bet that travel demand — especially among affluent customers — will hold up or even grow as borrowing costs ease and high-net-worth consumer confidence stays strong. It is also likely strategic in the sense that most other investors are fixated on the cruise industry staples such as the Carnivals and the Norwegians, Sundheim and his firm targeting Viking specifically as it will benefit from the same trends that benefit its competitors, but VIK has been less exposed due to its comparably lower profile.
5. Select Healthcare Precision
Danaher (DHR) — 162.5K shares — adds a defensive growth component. Danaher’s life sciences, diagnostics, and bioprocessing portfolio offers resilient margins and exposure to secular growth in biotech research and manufacturing — a stabilizer amid D1’s more cyclical adds. But I will also say that if you just look at DHR’s chart, you will find that far more often than not, when the Fed began cutting, its multiple expanded and its shares performed quite well shortly thereafter as demand for biotech and diagnostics products increased.
The Macro Thread
D1’s Q2 2025 new buys have a clear throughline:
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Housing & Construction Reacceleration: DHI and LPX are a paired bet on rate-sensitive cyclicals ready to rebound.
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Industrial Infrastructure Tailwinds: FLS taps into multi-year capital project cycles.
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Selective Consumer Confidence Play: VIK offers optionality if discretionary spending stays elevated, tacked on by the prospects of declining rates.
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Defensive Anchor: DHR keeps portfolio ballast if growth expectations slip a bit, but also certainly a rate-cut play as well.
Bottom Line
This isn’t a scattershot list — it’s a concentrated cluster of names tied to a potential early-2026 economic reacceleration, with a ballast in high-quality healthcare. If the Fed’s rate-cut path unfolds as markets expect, D1’s new positions could see both earnings expansion and multiple re-rating.
DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.
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