Home Depot (HD)

Based on technicals and fundamentals. He likes the home building sector. It is pulling back to a nice trend line. Positive seasonals until early winter next year.

(Top Pick Oct 9/14, Up 24.68%) This is the biggest position he has. It is in the right sector and is a leader in the sector. He does not use a stop loss when there is a break in liquidity, the bids just fall off a cliff. He does not sell in that case. He manages stop losses manually.

(A Top Pick Dec 12/14. Up 17.89%.) The strongest part of the US market right now is the domestic landscape. Lower oil prices and housing price recovery. This company is in that sweet spot in one of the strongest parts of the economy. He continues to really like this.

90% of revenue is US so no currency headwinds. People can still spend a lot more on their home than they have done so far. 2/3rds of the housing stock in the US is over 27 years of age so more maintenance is required on the homes. HD-N are shareholder friendly in that they buying back stock and half their earnings are paid back in dividends.

This has been under a huge amount of downside pressure in the last little while. The chart shows it has recently been in a downward trend. The key is that seasonality tends to start moving higher around October and continues moving higher right through to the end of the year. Wait until about the middle of October, but between now and then, watch for any weakness as an opportunity to accumulate.

Basic technical analysis shows this has higher highs and higher lows. It might pull back to its trend line in this current correction. If you see it bounce off of a level near where you estimate where the trend line is, that would be the point where you Buy it. This is a great stock. Buy it if it corrects a bit.

It is cyclical. Pump prices and jobs are all favouring home improvement. People are now getting around to discretionary home improvement from after the last crash. Posted a phenomenal quarter with buybacks in place. Dividend $0.59 Yield is 1.99% Estimated P/E: 22.32 Doing everything right.

(Top Pick Sep 9/14, Up 35.90%) He just can’t keep using it as a top pick. It continues to execute and takes market share. He would continue to buy it today.

(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.