Dog of the Dow #8: Home Depot (HD)

With an increase in first time home buyers due to government incentives, low interest and prices I think you will see an increase in home related hardware sales. Also people tend to do home repairs when times are tough. Add to this the major change in HD as far as customer service since the management change. I think HD is a good long term investment that will see continued growth as more bank owned properties sell.

Agree with Rolllo. I would expect Louis to do a little more research.

Positive same store sales beginning in 1Q10. Positive momentum from management changes that started in 2007 truly begin to take off in 2010 (supply chain, merchandising, customer service). Overall home improvement retail to perform better than S&P in 2010 but HD becomes best of breed.

If people don't buy new houses they still have to fix what they have or, if they need more room, add on. Many people will upgrade their houses by renovation.

Remodelers use the Depot and Lowes more than builders so that might actually work to help sales. Plus Home Depot is the first place do it your self people frequent. Most builders rely on lumber yards like Builders First Source because they are geared for builders and less time is wasted by the crews.

I have noticed lately that inventory at Home Depot is very skimpy, and there is somewhat of a frantic mood by the employees. They've even taken to yelling hello when you come in the door like they do at Sushi bars while at Lowes things are about the same as they always were.

The way I figure it, if I can't afford a new sunrooom or contractors, I'll be doing my own repairs. For supplies and knowledge, I'll go to the home-improvement store. Retailing in general is going to be bad through 2010, maybe into '11, but within that framework, I'll call HD to perfrom comparatively well. Look at the recent numbers. They predicted lousy, but only did bad. Sort of a negative way to look at it, but at least a bright spot. Also, I like being greeted when I come in the door, and have been able to find more help lately. That's improvment in my book. If the employees are a little frantic, that's just part of the times.