Home Depot (HD)

(A Top Pick Sept 3/14. Up 31.02%.) The largest home-improvement retailer, and leveraged to the improving US housing market. We are less than half way through the whole recovery program and people want to fix up their houses. Housing is appreciating, so they are going to see more business. Stock is getting up so much that it is getting expensive.

(A Top Pick April 29/15. Up 49.46%.) When the US housing market restructured and everyone’s mortgage went underwater, the 1^st thing they stopped doing was putting money into their homes. When they start to get back above water again, they start renovating. This still has more upside.

It is a core holding for a lot of income investors. Great business, management and margins. Unlike other retailers, they are defensible against this Amazon online retailing trend. It is a great way to play the housing sector improvement and home improvements. It has a strong dividend growth profile (20%/year). 2.1% dividend yield.

(A Top Pick May 6/14. Up 47.86%.) This was a play on improving US housing, home turn over, home resell and GDP growth. 90% of its earnings come from the US.

A play on the housing recovery and is one of those that protect you. If you don’t see housing starts grow dramatically, the renovation market tends to pick up. Very, very well-managed company. ROE is very high, pushing 70%. Expects they will do about $6 a share in 2016. Not terribly expensive and yet has a good growth profile. Dividend yield of 2.18%.

People have put off home renovations for many, many years. Now that their houses are back in the black and they are starting to feel better about the stock they have in their home, they are now starting to spend money on renovations.

Has been a great stock. A very well run company. They have benefited from a pickup in home renovation. You always have to pay a good multiple.

A very good, well-managed company. At this point in time it is very well positioned for the economy that is slow growing, but certain areas of it have lots of potential. The household formation of the US peaked in 2005-2006 in the $1,500,000 range. We are just now poking our head above the $1 million range. Because of this, there is a long ways to go to getting back to full capacity of household formation. This company is uniquely positioned to take advantage of that. Trading at about 20X earnings.

US housing market continues to recover, which is the story behind this company. There are also very favourable demographic trends for them. Houses are aging in the US and interest rates remain low, and there is a big pent up demand for home-improvement and remodelling projects. US consumer is becoming more confident because the labour market is improving. Also, energy costs are cheaper now. Trading at 22X forward earnings with a 15% growth rate in terms of earnings per share.

Results are consistent with the better economic numbers and wage growth. She does not own it due to valuation.

(A Top Pick Feb 26/14. Up 45.53%.) Not an inexpensive stock. He expects them to make about $5.50 a share in 2015, which puts the multiples in the low 20s. They continue to outperform and surprise on the upside.

Once the winter thaws in the North-eastern states, he thinks there is going to be a tremendous wave to home improvement again this year. Home prices have continued to lift in the US. People have held off looking after their homes for years and are now starting to look after them again. PE is in the low 20s, but its CapX is less than half of its depreciation expense, so far cheaper on a free cash flow basis than on an earnings basis. Yield of 1.69%.

Benefiting from the resurgence in the US economy and better housing starts. Extremely well-run. A good company that buys back shares and regularly increases their dividends. In terms of valuation, he would not buy at these levels. If you own, you can continue to Hold, but he wouldn’t add to it.

(A Top Pick Jan 7/14. Up 30.04%.) This is a play on US housing as well as on GDP growth because as people have more money, they spend more. She is seeing revisions upwards for US GDP growth. The age of housing in the US is very old at 27 years, so people have to renovate. It’s also a job growth story because a 3^rd of population of ages 18-36 are living at home now because of the recession, so hopefully the economy improves and with a stronger job numbers these people move out of their parent’s homes and form their own housing.

(Top Pick Nov. 12/13, Up 29.57%) It is the kind of stock he looks for. It came out of the recession better than it went into it. They raised their dividend and bought back so many shares it costs them less now to pay the larger dividend than before. There is pent up demand in home renovation.