Home Depot (HD)

(A Top Pick Dec 31/20, Up 25%) Home renovation has benefited them. It is stronger than Lowes right now, because Lowes is going through some restructuring.

HD vs. LOW Staying at home has benefited both. Post-pandemic, they can benefit even further from pent-up demand for larger, professional contracts. LOW has outperformed HD since last March, trading at 20x earnings vs. 24x for HD. LOW has a stronger growth rate, 14% vs. HD at 9%. Both names are great, but LOW gets the edge.

He prefers playing the home builder trend through Home Depot and Lowes, even Carrier or Trane, instead of DR Horton. Consumers are going to Home Depot as much as Walmart. HD had a nice pullback as interest rates climbed, so now is a good entry point.

(A Top Pick Jan 02/20, Up 22%) He sold it at $267 in mid-December to buy Uber and Comcast instead for the economic reopening. He still likes HD, but sold because the housing boom was well underway. You can buy HD now and make 5-10%. A great company.

(A Top Pick Jan 29/20, Up 20%) One of the most successful companies he's ever owned. They're raised their operating margins from 11% to 16.5% over the last 10 years which leads to a 50% profit increase. Great managers, but aren't resting on their laurels. Apple is also investing heavily in technology, plus there's the macro view--HD will benefit from home renovation during this pandemic as people move from the cities to suburbs, and people now have excess cash to spend on renovations. This trades in the low-20s in PE.