Extra Credit Project COA4131
Name of Stock: The Home Depot
Symbol: HD
Current Price: 51.94 USD
52 week range: 28.13-52.15 USD
1) In two paragraphs describe the company and what it makes: The Home Depot is an American retailer of home improvement products and construction services. It is the largest home improvement retailer in the United States and fourth largest general retailer according to the U.S. Securities and Exchange Commission. It is headquartered in Atlanta, Ga. As of January 30, 2010 The Home Depot operates 2,248 big-box format stores across the United States (also, Peurto Rico, Gaum, and the Virgin Islands), Canada, Mexico, and China. Stores average approximately 105,000 square feet of enclosed space with an additional 24,000 square feet of outside garden area. The store specializes in all aspects of home improvement: appliances, garden, hardware, plumbing, paint, lumber, flooring, building materials, and installation services/rentals. The Home Depot serve three primary groups: Do-It-Yourself (DIY), Do-It-For-Me (DIFM) customers, and Professional customers. In January 2012 the company acquired Redbeacon.
Dividend: 1.16 (2.25%)
Company Address: 2455 PACES FERRY ROAD NW,ATLANTA,GEORGIA 30339
Discussion Questions
2) What are the trends of the company? The daily trend for The Home Depot has been UP for 5 days with a very high short term risk. In 2011, the stock was under $40/share and dropped drastically in August however, since October of last year the stock has showed an upward trend and is currently trading at 51.94 USD as of 4/19/12. Given the strong uptrend the pullbacks are short lived and gives you an excellent oppurtunity to buy the stock before it resumes uptrend.
3) What does the press say about them? According to CNBC's Margo Beller, Piper Jaffray, a U.S. middle-market banking firm that sells financial advice and investment products, upgraded shares of Home Depot and Lowes in anticipation of a surge in home remodeling. The declining home prices and housing market have little to do with this renovation boom. "There's a large home-remodeling cycle that's just beginning to develop," according to Keith. "The main driver to spending this year on big tickets was that people were tired of delaying projects." A Piper jaffray survey of 440 homeowners found that people are spending more on remodeling projects with an increasing price for each project as well. The analyst raised his rating on Home Depot to "overweight" from "neutral" and its price target to $62 from $47. Another analyst stated "I think we're very early in the game right now for Home Depot and Lowe's," Oppenheimer analyst Brian Nagel said on "Fast Money". With several quarters of stabilization in the sector and housing data made Nagel bullish on the stocks with a forecast of "prolonged recovery for both, and I think there's gains for some time to come." One survey by the National Association of Home Builders shows the highest level of optimism in four years doubling since September. Nagel also said that over the next five years he saw "more that $5 of growing power" in Home Depot's share price and that to be a buyer of Home Depot would give a slightly higher yield off it opposed to others in this market.
Sources:
1) http://www.cnbc.com/id/46429231/?Home_Depot_Lowe_s_Could_See_Lift_Analyst_Says
2) http://www.cnbc.com/id/47063205
4) What do analysts say about them? As stated above in the previous answer analysts from Piper Jaffray and Oppenheimer are optimistic that the stock for The Home Depot will continue its uptrend and and that they would rather be buyers of Home Depot stock than others in the housing industry, such as Lowes, due to the fact that buyers should get a higher yield from it. It has been upgraded to "overweight" from "neutral" in response to current surveys which suggest an increasing/continuous upward trend for the company. According to CNBC Final Trade, Pete Najarian thinks Home Depot is a buy.
Sources:
1) http://www.cnbc.com/id/47062071