Home Depot (HD)

Owns it because interest rates are coming down by year's end and there's a 5-year super cycle.

Last September, he sold and took profits. Shares are trading ~24x forward PE, for 5% EPS growth. Valuation's expensive. EPS growth rate expectations have come down. Cautious spending by consumers, stock's slipped below 200-day MA. Long-term inflation is dampening the DIYers, sluggish home sales. A name to own early economic cycle, and we're about mid-way through now.

He wouldn't buy at this point, consumer is still very weak. YOY organic growth is negative. Still trades at a fairly hefty premium compared to the market and to its own historical levels. He'd wait till consumer and housing are stronger.

Interest rates cuts are stalling, so shares are -7.74% the past month; housing turnover and the weather have been bad. Tool sales are down. It reports tomorrow, but he will buy after that report. He has faith, because when the street was shorting this in 2008's housing crisis, HD gained market share and bought back a ton of shares.

It reports Tuesday. He expects a soft quarter from weak housing, but HD will benefit from the rebuilding from the south-eastern US and the L.A. fires.

Housing has a long way to go, but was up in Q4. She will take any improvement. They have very easy comps. 

It's a long-term monster he's owned forever. Remains profitable with capital efficiency. Ultimately, it needs to benefit from a home recovery and improvement spend, and that needs lower interest rates. He's patient.

Still buying here. Purchase of SRS broadens its addressable market further. Getting better at e-commerce. Pursuing repair and maintenance segment.

This and Lowe's are quality businesses that he's long owned. Healthy profits and capital efficiency. They will benefit if interest rates decline. Be patient.

It still doesn't sell at 30x PE. If the Fed cuts rates, this will earn more money than people think. Buy at $410-415.

They report tomorrow. Lower interest rates will push sales, and the extreme weather is behind us.

Is the top stock to buy in an interest rate cut cycle, which is happening. (The Fed will decide tomorrow.)

Is both a cyclical and secular growth story and can ride any cycle. It can grown in any environment, and not held hostage to interest rates. It benefits from aging homes (that need repairs), Millennials want to own homes and will spend at HD, and the new home shortage which need pro contractors to build them (who spend at HD).

It's too early to enter HD or Lowes, whose earnings will be lower this quarter than the last as their multiple hovers near historic highs. He needs to see more consumer activity here. He's on the sidelines.

A decade-long theme, not short term is in housing, if interest rates fall from 6.7% to 5.5% (likely in 2025). She prefers Home Depot in this space, since competitor LL Flooring went bankrupt, and HD has easy comparisons. They had 7-straight quarters of negative comps, but will snap that. She expects better gross margins.