Home Depot Story

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HD -- USA Stock  

USD 268.55  2.85  1.07%

It looks as if Home Depot will continue to recover much faster as its share price surged up 2.74% today. Home Depot's current daily volatility is 1.38 percent, with a beta of 0.71 and an alpha of 0.14 over DOW. As many millenniums are excited about current market changes, it is only fair to digest Home Depot. We will evaluate if Home Depot shares are reasonably priced going into September.
Published over a month ago
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Is Home Depot (NYSE:HD) way too risky for millennials?
Home Depot reports roughly 8.7 B in cash with 14.75 B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 8.09. This firm reports 41.75 B of total liabilities with total debt to equity ratio (D/E) of 3.31, which may imply that Home Depot relies heavily on debt financing. The company has a current ratio of 1.15, indicating that it is not liquid enough and may have problems paying out its debt commitments in time.
Investing in Home Depot, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Home Depot along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.

How important is Home Depot's Liquidity

Home Depot financial leverage refers to using borrowed capital as a funding source to finance Home Depot ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Home Depot financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Home Depot's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Home Depot, but it might be worth checking our own buy vs. sell analysis

Home Depot Correlation with Peers

Investors in Home Depot can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Home Depot. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Home Depot and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Home Depot is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage. Please check volatility of Home Depot for more details

Breaking down Home Depot Indicators

Home Depot appears to be very steady, given 1 month investment horizon. Home Depot holds Efficiency (Sharpe) Ratio of 0.23, which attests that the entity had 0.23% of return per unit of risk over the last month. Our standpoint towards determining the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for Home Depot, which you can use to evaluate future volatility of the firm. Please utilize Home Depot Market Risk Adjusted Performance of 0.4512, risk adjusted performance of 0.3442, and Downside Deviation of 1.54 to validate if our risk estimates are consistent with your expectations.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Over 3 percent surge for Home Depot. What does it mean for shareholders?

Latest skewness is at -0.94. Home Depot has relatively low volatility with skewness of -0.94 and kurtosis of 4.6. However, we advise all investors to independently investigate Home Depot to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns.

Although other entities under the home improvement retail industry are still a bit expensive, Home Depot may offer a potential longer-term growth to shareholders. To sum up, as of the 18th of August 2020, we see that Home Depot follows the market closely. The firm is fairly valued with very low probability of distress within the next 24 months. Our present 30 days 'Buy-vs-Sell' recommendation on the firm is Strong Buy.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of Home Depot. Please refer to our Terms of Use for any information regarding our disclosure principles.

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