Home Depot (HD)

(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).

(A Top Pick September 7/16. Up 14.66%.) This is benefiting from a variety of things, not the least of which is household formations and housing starts increasing. We are still below trend, which over the last 3, 4, 5 decades, has been between 1-2 million starts per year. We need 1-1.5 million to keep up with the growth of the population, and we are currently at about 1.1 million.

She likes home improvement. It is really about US housing, recovery, turnover, the age of the housing stock. All those factors benefit this company. As employment improves and consumer confidence improves, people will spend more on their home. Two thirds of the housing stock in the US is over 30 years old, and about half is actually over 40 years old. They just reported and had good numbers. Dividend yield of 2.3%. (Analysts’ price target is $175.)

This is in a really good place. People are spending money on homes and the company doesn’t have a lot of competition. A lot of their work is with professional contractors. A very high quality company. The valuation is decent, and doesn’t think you will get hurt owning this.

(Market Call Minute.) A leader in home improvement retail. A little ahead of where he would like to buy it. Weak Buy to a Hold.

This is a play on the US economy and housing market. The company thinks they are still in the middle innings of the housing recovery. The 2008 recession was so severe that recovery has actually been delayed. The company is doing very well on building out their online strategy. Also, this whole sector is somewhat insulated from Amazon (AMZN-Q).

(A Top Pick June 27/16. Up 24.19%.) He still likes this and it is still a Buy for a long-term buyer.

This fits into the millennial trade. Young people are buying/getting homes, and a lot of them are fixer-uppers. He really likes this company. Numbers have been strong. A well-run company and positioned well in the group.

An outstanding company. It has been hitting it out of the park in the last quarter. He can think of few other retailers that are at such a good level with their positioning in the marketplace and what they are offering. There are more good times to come.