Two Ways to Play: Home Depot Hammers Home Earnings
Strengthen your portfolio in good times and bad.
Home Depot (HD) reported results for its fiscal fourth quarter. The largest US home improvement company said earnings came in at 24 cents a share, 7 cents better than Wall Street expectations. Revenues fell by 0.3% on an annual basis to $14.57 billion vs. estimates of $14.07 billion. But the company issued upside guidance for the fiscal 2011 year with earnings of $1.79 a share vs. $1.73 consensus.
Home Depot also raised its dividend for the fist time since 2006 by 5% to 23.625 cents a share. In the press release, the company stated, "It is our intent to increase our dividend every year. Our longer-term targeted dividend payout ratio is 40 percent." Shares are up by 1% in the premarket.
From the Bull Pen: Be careful of getting too overweight Home Depot with the stock hitting a new 52-week high. If you're looking for retail, Walgreen (WAG) may present a positive risk/reward opportunity. One strategy may be to fade (read: buy) the weakness into $33 support with a sell stop below that level.
From the Bear Cave: Careful of shorting a dull market. But the homebuilders ETF (XHB) might be tracing out a double top as the stock has rallied on weaker volume. A close above $16.30 would invalidate this bearish pattern.
For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.
A Quick Check Around the World
Asian trading closed with the Nikkei -0.47%, India 0.30%, Hang Seng 1.21%, Shanghai -0.69%, and Taiwan 0.49%.
Across the pond, we see the FTSE -0.06%, CAC -0.53%, DAX -0.71%
As of 8:05 AM EST, S&P Futures are trading -2.25 to 1105.00. Nasdaq futures are -06.25 to 1814.75.
A Look at Commodities
Over in commodities, crude oil is -1.09 to 79.21 while gold is +00.60 to 1113.70 this morning. Silver is -0.032 to 16.185 and copper -0.0255 to 3.2815.
The dollar Index is +0.0650 to 80.6500.
On the Radar
09:00 Case-Shiller 20-city Index: -3.0% consensus
10:00 Consumer Confidence: 56.5 consensus
Click here for the full trading radar. Good luck today!
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