Home Depot (HD-N)

He owns retail, but not names like LULU or Nike, but rather defensive ones like this. He sees more weakness in pooer consumers (i.e. Dollar General which plunged recently). HD benefits from the general consumer trade-down of staying in your home longer and fixing it up. The days of consumers being flush with cash are over. Done. Inflation seems to be weakening the low end of the job market.

He trimmed, because it's not going anywhere near term. He is building cash for the current market pullback. He will add to Nvidia, Microsoft and Apple on more weakness.

They report next week. HD suffered when people stopped spending on homes post-Covid, but that's now past. People are spending on experiences, but also on their homes (and goods) again. Since mid-May, HD has risen 17%, outpacing the market. She expects a good report and for positive trends to continue. It helps that commodity prices have come down.

It usually trades at a big premium to the market of 18%, but now only 2%. Shares haven't moved since March. But now could be a great opportunity for a catch-up trade now that we're seeing strength in housing.

The home reno space has been in a slump, because people have been travelling and enjoying experiences. During Covid, they stayed home and renovated, which she feels will return, because there isn't enough housing to buy. So, people will stay in their homes and fix them up. Lower material costs will help. HD and Sherwin Williams are buys now.

He's waiting for the price to pull back. The PE is not historically high, but shares haven't done much lately.

EPS was $3.82 vs $3.8 expected. Revenues were $37.2 mln vs $38.2 expected. The company cut its sales forecast for the full year amid a slowing/normalizing consumer but shares are now up 4% after the release, so some of this weakness was likely expected. On a forward basis, shares trade at 18X earnings which is on the lower end of the valuation range for the company for the last 10 years. There will likely still be another noisy quarter or two in the short-term for the company, but we wouldn't have much in the way of concerns with HD, taking a longer-term outlook. 
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Has owned shares in the past, but not at the moment.
Over 20% hurdle rate in order to buy.
Waiting for shares to fall before buying.
Excellent business model with great product line.
Good for long term investors. 

Wonderful future, loves its model. Trades at a premium to the market and to LOW. Today, he'd choose LOW. 

He just sold it because the housing environment doesn't look good and interest rates are creeping up. Plus, wage inflation.

A little concerned. Retail has benefit from selling higher-ticket items, but last quarter HD had fewer transitions. It beat only because of those higher-ticket sales. Overall, we're still seeing disinflation, but how much longer can the consumer remain resilient? Savings are down a lot from a year ago. Will there be some trade-down?