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Home Depot -- slowly being taken private

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The Home Depot Co. (NYSE: HD) is quickly putting to work the $5 billion of cash it raised through a debt offering. Its board has authorized the immediate repurchase of $3 billion of stock through an accelerated share repurchase agreement.

Home Depot has repurchased $6.7 billion of stock, or 173 million shares, this year. Since 2002, it has purchased more than 450 million, or roughly 19%, of outstanding shares.

Taking into account the $5 billion the company recently raised, it will have about $12 billion of debt on its balance sheet. Home Depot is expected to generate about $11 billion in EBITDA, so annual EBITDA covers total balance sheet debt roughly about 1x -- a tremendously conservative capital structure.

Investors need to hear evidence that the worst is over in same-stores sales decline. The most recent figures were simply awful. When better sales figures are announced, Home Depot stock should soar.

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Last updated: November 11, 2009: 08:51 PM

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