Home Depot (HD)

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.

(A Past Top Pick Sep 14/16, Up 34%) It is very well managed and they will increase the dividend. It is a pretty nice place to sit in a major trend that is positive going forward. They are in a great position because Millennials are getting into the housing market and even if they buy used and have to renovate, they still have to buy appliances.

We are still in relatively mid-stages of a US housing recovery. Canada may be in the 8^th or 9^th inning, but the US is in the 5^th or 6^th inning. Trading at 20X Forward Earnings with a 13%-15% growth rate. Not a very expensive valuation. Dividend yield of about 2%+. Have returned $46 billion to shareholders through dividends and share buybacks, over the last 5 years, which represents 25% of their market cap.

This will benefit from hurricane reconstruction, but that is short-term temporary. The reason to own is because of the GDP growth in the US and the increasing household formations. Over two thirds of existing housing is over 30 years old, which is positive for renovators. Also, household turnovers and employment levels are improving. New housing inventory is very low in the US, so more people are choosing to stay in existing homes, and to renovate and upgrade. The one retail sector that has been relatively insulated from Amazon (AMZN-Q). Wait for a pullback.

Flooding will likely cause their business to pick up. He does not know if that is reflected in the share price. They are shifting the merchandise in the stores to higher prices and more profitable items. They have not increased stores. They are offering more services to seniors and millennials who don’t want to get their hands dirty.

A very well-run company. We are many, many years into a residential recovery, but you have to understand that this is cyclical. Looking at the multiple you are paying, he is finding better opportunities in other parts of retail where there is a lot more concern around the business model. Prefers companies that are a little bit more out of favour. Looking a little expensive overall. 2.3% dividend yield.

(Market Call Minute.) He is very interested in looking at this as millennials are starting to move out of their parents’ houses. This could be a big beneficiary.

The demographics are powerful for this one. They had solid earnings, have a solid balance sheet and pay out a good dividend that increases. It is hard for AMZN-Q to get into this except in things like small appliances. (Analysts’ target: $175.00).