Seven Reasons Home Depot's Got It Nailed Down
The company remains the one-stop shop for all things handy.
Sure, there's mom-and-pop hardware stores and supply houses, but if you're like many Americans, Home Depot (HD) is probably somewhere near the top of your list. The fact that the company is a destination spot -- a one-stop shop for the handy (and those that only think they're handy, like myself) -- is a major reason why the company can still have a bright future.
Here are some other things worth a mention:
1. Home Depot is trading tantalizingly close to a new 52-week high. I'm a value guy at heart and I don't like to chase stocks. At the same time, companies trading near their highs or that make new highs (I sense it's got a good shot) get a lot of attention, so this is something I'm keeping in the back of my head.
2. Many people seem much more upbeat about their financial future than they were six months to a year back, so I think they'll be more likely to drop coin on seasonal items this winter (ie, snowblowers, shovels, and decorations).
3. People are still afraid to spend big money on higher-end items, but when it comes to decorating or improving their personal abodes in some way, they seem to be a lot more willing to pull out their wallets. To many, it's money well spent, improving what's likely among their most treasured, pride-producing, and valuable assets.
4. The third-quarter announcement is coming right up. The company is expected to earn $0.36 and I think it will beat by at least $0.02. The fact that its whooped estimates the last four quarters gives me some confidence it could do it again.
5. I think a lot of people would love to nail down the more than 3% forward yield.
6. It trades at a little more than 18.1 times this year's estimate, which doesn't sound too terrific. But because there could be some upside to the $1.67 estimate that's currently out there for next year, I'm a bit excited.
7. I can't help but think it's a "pick-em" when it comes to the Lowe's (LOW)/Home Depot rivalry that's been brewing forever. My macro outlook for this space can apply to the folks in the blue aprons, too.
Hey, have a great day!
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter