2024-04-15 15:35:08 ET
Summary
- The Home Depot, Inc.'s earnings drivers include the number of stores, comparable store sales growth, profit margin changes, and the number of shares outstanding.
- Shares outstanding have steadily declined, as the company used its strong free cash flow to buy back stock.
- Home Depot's profit margin has increased over the years due to good management and its strong market position in the home improvement industry.
- Near record-low housing turnover is currently hurting Home Depot's sales growth and profit margin.
- Despite Home Depot's strengths, I don't expect buying yet until the P/E ratio is lower and a recovery in home sales is clearer.
Oops!
All investors have their regrets. I share one with many people – Amazon (AMZN). I bought some around the year 2000, but fairly quickly sold it. Another regret is The Home Depot, Inc. (HD) . Someone told me to buy it in about 2009. It was an interesting enough idea to me that I remember it to this day, but I did nothing. That $25 stock is now $340. Oops!...
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Home Depot Stock: A Deep Dive Finds A Neutral View