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Posted
Aug 19 2009, 08:30 AM
by
James Dlugosch
Rating:
Money Blog: Top Stocks Blog - MSN Money
 In the home improvement retail space, an interesting battle is brewing between Home Depot (HD) and Lowe's (LOW).
Home Depot, the first mover in the space, has dominated the category with its sheer size. Upstart Lowe's, on the other hand, carved out its niche by focusing on the female market and cleaner, easier to understand stores. Both wanted to be very big, and they both succeeded -- the total market capitalization of these two is more than $75 billion. That's big, but they used to be bigger.
Bing: More on Lowe's and Home Depot
The collapse of the home building market sent both companies spiraling over the last few years. During that time, shares of both companies have been on a parallel path mostly downward.
But that may be changing based on the results from last quarter.
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Posted
May 20 2009, 06:11 AM
by
James Dlugosch
Rating:
Money Blog: Top Stocks Blog - MSN Money
You wouldn't know it to read the headlines, but the bottom of the housing crisis appears imminent, and that means opportunity for savvy investors.
Let's look at the indicators. On Monday, Lowe's (LOW) reported results that beat expectations. Although profits slid by 22%, the company earned 32 cents per share, besting analyst expectations of 25 cents per share. Shares of LOW went higher on the news.
Home Depot (HD) followed on Tuesday with earnings that also beat expectations. But unlike LOW, shares of HD fell on the news. It seems investors were reacting to worse-than-expected housing start numbers released the same day.
But on closer inspection, the housing start numbers actually showed signs of improvement. Only the multifamily segment was down. Single family housing starts actually improved slightly.
To me, this is a sign the housing sector is starting to turn around. Now, many investors are expecting long beaten-down stocks like LOW and HD to rally in advance of the improvement in this sector
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Posted
May 18 2009, 10:25 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
Robert Niblock, chief executive of Lowe's Companies (LOW), surely must be pleased Monday. Shares of his company are riding high after the home-improvement retailer surprised the Street with a solid profit and good outlook. Niblock is full of optimism about the housing market, saying that housing turnover is "showing signs of a bottom" and consumer confidence is improving. Also Monday, Citigroup upgraded Lennar (LEN) to buy from hold. That was enough to help push up stocks in several sectors, as investors crossed their fingers and hoped Niblock was on to something.
But wait. Didn't we just see numbers showing that foreclosure filings hit a record in April? Every time a CEO or analyst predicts a bottom in the housing market, we see other reports that crush those hopes entirely
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Posted
Nov 18 2008, 05:51 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
As of the end of the third quarter, Warren Buffett's Berkshire Hathaway had significant holdings in almost 40 major U.S. companies.
Buffett lightened up his ownership in a small number of public firms compared to what he held in the second quarter. Most notable was a reduction in his piece of Carmax. The used car company is being hammered by rising unemployment and lack of consumer credit availability. Its shares have lost 70% of their value over the last year.
Buffett's position in Bank of America also fell from nine million shares in June to five million in the most recent period. Since the bank's stock is off 55% over the last six months, the reduction in exposure turned out to be a good call. Buffett also cut his stakes in Home Depot and Lowe's moving him out of companies with significant risks tied to housing.
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Posted
Aug 26 2008, 10:57 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
The slumping housing market continues to take a bite out of home improvement - and there’s no immediate relief in sight.
Consumers are pressed by high gasoline and food prices, leaving less cash to upgrade the kitchen or bathroom.
Home Depot and Lowe’s have already taken a hit.
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Posted
Aug 18 2008, 07:47 AM
by
Anthony Mirhaydari
Rating:
Money Blog: Top Stocks Blog - MSN Money
Shares of both Lowe's and Home Depot have rallied more than 20% over the past month, partly because investors are starting to realize a silver lining to the housing-market downturn.
Demand for the quickly aging stock of existing U.S. homes will increase over the next few years as new home inventories are depleted, especially now that home builders are sitting out the market or going bankrupt. The retailers' fortunes should improve in the coming years as older houses start to require significant outlays on flooring, landscaping, paint, and appliances
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Posted
Mar 21 2008, 12:26 PM
by
Robert Walberg
Rating:
Money Blog: Top Stocks Blog - MSN Money
Perhaps David Batchelder, a director of Home Depot, was inspired by the Easter theme of the resurrection when he decided earlier this week to spend more than $28 million to purchase 1.1 million shares of the home improvement retailer's stock. Batchelder now owns 1.9% of Home Depot. Not surprisingly news of the transaction sent shares of the beleaguered retailer sharply higher in Thursday's trading.
But should you follow the lead of this insider and start accumulating Home Depot stock? Investors often perceive insider buying as a strong (re)entry signal for beaten down stocks. Home Depot definitely fits that description, as the company has seen its share price tumble by 27% over the past year. Nevertheless, there is no reason to hurry back into the stock -- despite the bold action taken by Mr. Batchelder.
First of all, the housing market isn't getting any better as evidenced by the weakness in the most recent housing starts data. Fewer homes being built means less commercial business for granite countertops, kitchen cabinets, floor tile, etc. Meanwhile, the lifeblood of home remodeling projects -- home equity loans -- are increasingly difficult to come by these days. Toss in the slumping economy and reduced consumer spending into the mix and it's safe to assume that the pace of remodeling efforts will remain slow for the balance of 2008 and into 2009.
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