Toll Brothers' (TOL) share price declined 33% in 2018, despite beating analyst estimates consistently throughout the year. The primary reason behind this downturn is the pessimistic outlook of the housing market in the United States. On the back of 4 Fed rate hikes in 2018, Toll Brothers has taken a hit in its order flow as mortgage rates continued to rise. And because housing depends heavily on macroeconomic factors, we can't look at the company in isolation from a bottom up perspective only.

There are negatives and positives underpinning the housing industry, but the big picture looks much more negative than positive. On this one, however, we are putting on our contrarian hat and betting that the worst is behind us even if growth isn't going to be as robust as we originally thought.

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