Home Depot (HD)

(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.

The crème de la crème in the retail space, something Amazon can’t fight. There are a lot of renovations. In housing, people are pretty much buying whatever they can because supply is not available, especially in the Midwest and California, so you get a teardown and start to renovate.

He likes this company and the space. People have stopped spending money on “things”, as much as they are now spending on “experiences”. The one exception would be on the home. They are renovating like gangbusters. This company is great. They just continue to execute on their plan.

(A Top Pick May 18/16. Up 23%.) They just reported, and it was very positive. US comps are up 6%. The US housing market is very healthy.

He loves this. A great way to play housing from 2 points of view. First of all, for new housing where people are going to them for appliances. Also, people are opting for remodelling, and this company will be a great beneficiary of that trend.

(A Top Pick Feb 17/16. Up 38%.) Has owned this for many years and it has been a great company for him. It is in the sweet spot of where we are in the economic cycle. Low interest rates, buying new homes, renovating, etc. is what is motivating people to go to this company. One of the best managed companies he has ever covered.

(Top Pick Feb 9/16, Up 28.27%) She still likes it. It is a play on the US economy. As employment and GDP improve people may spend more on home improvement. With a third of the age group 18-36 still living at home and as the job environment improves they tend to move out into a home of their own. The company is well managed and always increases their dividend. They report later on this month.

He likes owning companies that can grow a dividend. This has about 2,200 locations and has been growing same-store sales at about 7% for the last 5 years. They’ve grown their dividend 21% a year over the last 5 years. If you think the consumer is improving, this is a good place to go. Technically, after having consolidated over the last year, the stock is breaking out. Dividend yield of 1.96%. (Analysts’ price target is $148.67.)