Home Depot (HD)

Home improvement is a great space with strong competition and decent margins. You can't go wrong with HD. They're generating cash flow and buying back stocks. But he prefers Lowe's.

Solid blue-chip US retailer dominant in its space. Had a brilliant run in the last 5 years with a nice correction in January and February. These guys are a solid retailer with good prospects.

It has been one of the best stocks in the last years off of the bottom of the markets in 2009. It has been suffering lately partly because of the increase in the interest rates that has started to take the shining off some of the housing related stocks. Also, the valuation probably went a little ahead of itself.

In the middle innings of the US housing recovery. Well-managed, They've more than doubled their margins since 2008. (Analysts' target of $211.69)

Down around 10% recently. They missed their just-released earnings. Tomorrow's housing numbers will show the housing is in a big recovery, which means DIY renos are on a big recovery. The number-one chain. A blue-chip name. (Analyst’s price target is $208.76.)

They have a huge moat. A great company. Really hard to replicate. Done a great job improving margins. A safe play for the next few years.

Likes it. Good company. Consumer spending strong in the U.S. which will help it long term. Well-managed with good service. A good hold at these levels.

He is very bullish on the US housing and renovation market. He would have no hesitation in owning this. The valuation has certainly gotten up there, but you are getting pretty good growth from a retailer, and he doesn't see Amazon encroaching on them.

(A Top Pick Feb 14/17. Up 32%.) This is really a play on a resurgence on the housing market in the US, which is growing very nicely in most major states. The millennials are starting to buy homes. This company is growing at twice the growth of the GDP on same-store sales. They've been able to grow their dividend north of 20% a year for the last 5 years.

Spending a significant amount buying back shares. This company is in a great spot. One of the few retailers in North America that is not impacted by the on-line phenomena. Most purchases is on an “at need” basis by contractors. It’s very insulated from the on-line phenomena. Valuation is getting expensive and is trading at a premium multiple to the market at around 24X. One of the few retail companies you can buy without worrying about Amazon or some other online retailer. He would like to see a pullback before stepping in.

This is at an all-time high, so what do you do in 2018? Just because this is at an all-time high, why punt it out of your portfolio? In 10 years time, this company will do very well. There is a lot of room left. Dividend yield of 1.9%. (Analysts’ price target is $183.)

At these levels it is a great company for the long term. He owned it at one time. There is still room here. You end up kicking yourself for always thinking they are bit expensive. With housing coming back in the US, they are going to put some money back into their house. He would establish a half position and then see how it goes.

On his Watch List rather than his Recommended List. Had owned this for several years and it had been a very strong performer. Prefers Sherwin Williams (SHW-N) which has an acquisition that will give them synergies, and are in a position where the business is more resilient.

(A Top Pick Nov 15/16. Up 35%.) This was made on the play of improving GDP growth in the US, and improving housing. There is a shortage of inventory in the US housing market, so many people are opting to stay in their existing home, and to upgrade and renovate.

A great and powerful brand. This has the ability to withstand any attacks that might come from the likes of an Amazon. When you look at the online sales, it is about half of what you would see in the apparel space. The hurricanes should be helpful for the next few quarters, as these economies have to rebuild. It should continue to do well.