Since the lows of the great recession, The Home Depot has rallied and continued to provide investors with great returns. With the Spring season upon us, many people head outside and discover they need new improvements around the house and head out to find a solution, and this is where the company is set to capitalize. Many of the locations offer small classes and educational demonstrations to help people fix and update things themselves. Not only that, they offer help in locating the best items for the job. The reason I say this is not everyone is a hands on type of person so customer service in this area is key.
Some of the main competitors are Menards and Lowes, which provide the similar services and offer many of the same products. In the ever consolidating retail environment, it would seem the potential is there for one of these three to either fold or be bough out, so keep your eyes peeled, that way you can be alerted if anything were to arise.
Taking a look at the stock chart using the monthly time frame, we can see that the stock has done nothing but rise since 2009, and this is indicative of many equities in the market. It is important to fully understand how the stock could potentially be overbought or overvalued, as the market hasn’t stopped its bullish trend for over 7 years. The worst would be entering a stock at the highs only to have you value fall. Obviously predicting the highs of stock are nearly impossible, but you can gain a good understanding of where the market wants to be and where it wants to go.
As previously stated, the retail market consolidating and this could become an issue as the home improvement sector has many competitors. With that, here are a couple other risks to keep in the back of you mind. First, the price competition has to be fierce as it doesn’t take much for someone to drive or order online. Especially with Amazon, price competition is something to watch for. Secondly, keep an eye on sales and see if the changing landscape are affecting overall sales, and if they are, look at the company’s online presence to see if they are changing. If the company is stagnant, that could be a negative strike against them.
This area of the market seems to be going well and unaffected by the falling retail sector, however, this does not man these companies are immune. Watch out and be cautions that this company maintains their upward trajectory. With that in mind, only you can determine if this company is a good fit and if you have any questions, reach out to an investing professional and they can help to point you in the right direction.
This story from Macroaxis reported on April 25, 2017 contributed to the next trading day price increase.The trading delta at closing time to the next closing price was 0.78% . The trading price change when the story was published to the current price is 27.54% .
Home Depot is rated below average in cash flow from operations category among related companies. Operating Cash Flow reveals the quality of a company's reported earnings and is calculated by deducting company's income taxes from earnings before interest, taxes and depreciation (EBITDA). In other words, Operating Cash Flow refers to the amount of cash a firm generates from the sales or products or from rendering services. Operating Cash Flow typically excludes costs associated with long-term investments or investment in marketable securities and is usually used by investor or analyst to check on the quality of a company earnings.