Opinions Christine Poole
Home DepotHDTOP PICKJan 12, 2016
Christine PooleStock price when the opinion was issued
As of Jun 05, 2026. Market Open.
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Solidly in consumer discretionary, which explains its fall. Very interest-rate sensitive -- rates didn't go down as much as expected, plus Iran war caused jump in inflation. People defer renovations because they're often funded with loans. Its earnings recovery is deferred, not aborted.
He got stopped out yesterday, losing 10% of his holding. He still likes it. Mortgage rates need to get below 10%.
Kevin Simpson
Dominant home improvement retailer in US. Its edge is being a one-stop shop for complex, multi-trade projects. Taking share from both LOW and specialty suppliers. Expanded into roofing, building products, and repair/maintenance. Stepped up e-commerce.
13% compound pace of dividend increases over last decade. Lagged effect of interest rate increases in US likely to shore up housing this year and bolster earnings. Yield is 2.50%.
Brian MaddenWith lower interest rates, buy the homebuilders. They reported a disappointing quarter because interest rates have been too high, but shares have fallen too far, so you can buy it here. Yesterday, they offered encouraging words at investor day if the Fed lowers rates (which it did today).
A play on the US economy including a recovery in housing, strong employment and improving consumer confidence. They are using 2.5% GDP growth over the next few years and feels there is still a lot of room to grow. Private and fixed residential investment as a percentage of GDP is about 3.4%, but the long-term average is 4.5%, indicating people are still underspending in this area. About two thirds of housing stock in the US is over 27 years old, so there is going to be increasing demand for repair/renovations. Post the recession in 2008-2009, about a 3rd of the population of 18-27 year olds are still living at home. As employment improves, household formation should increase, which will be beneficial. They are also focusing on increasing online sales, as well as their professional customer, which is only 5% of their customer base, but accounts for over 30% of revenues. Anticipates a dividend increase this year. Dividend yield of 1.85%.