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Steve Hach
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Steve Hach is the Senior Editor at ValuEngine.com, a Newtown, Pennsylvania-based stock valuation and forecast service. ValuEngine utilizes Ivy League financial research as the basis for its coverage of more than 7000 US, Japanese, and Canadian, and other foreign stocks. Hach utilizes... More
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  • HD, $HD, Stocks Jump Again on Positive Home Sales Report 0 comments
    Dec 2, 2010 11:00 AM | about stocks: HD
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    December 2, 2010
    ATTENTION Advanced Investors and Finance Professionals:
    If you are reading this you should download ValuEngine Institutional Software to see how VE’s powerful quantitative tools can increase your productivity and effectiveness.

    Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE

    Home is Where the Heart is...

    HD, $HD, Stocks Jump Again on Positive Home Sales Report, Home Depot Leads the Way

       So far today stocks are up once more as investors have reacted positively to good news on the housing front.  The National Association of Realtors announced a 10% jump in their pending home sales index.  Of course, NAR is not always a reliable source--due to the bias towards good news--and the figure remains more than 20% off last year's number.  Nonetheless, good news for housing has caused a pop for improvement centers such as Home Depot (HD.)  The good news on the housing front adds to the momentum HD found when it announced an earnings beat a few weeks ago.

      As of today, our models agree that HD is a viable target for investors.  ValuEngine has issued a BUY recommendation for Home Depot . Based on the information we have gathered and our resulting research, we feel that Home Depot has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE company size, volatility and price/sales ratio.

      Based on available data as of Dec. 02, 2010, we believe that HD should be trading at $29.82. This makes Home Depot 6.01% overvalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For HD, we base this on actual earnings per share (NYSEARCA:EPS) for the previous four quarters of $1.89, forecasted EPS for the next four quarters of $2.11, and correlations to the 30- year Treasury bond yield of 4.24%.

      Home Depot is the one of world's largest home improvement retailer. Home Depot stores cater to do-it-yourselfers, as well as home improvement, construction and building maintenance professionals. The Home Depot currently operates in the USA, Canada, Chile, Puerto Rico, and Argentina. The company also operates EXPO Design Centers across the U.S. and Villager's Hardware in New Jersey.

      Subscribers can check out the latest figures on Home Depot from our models HERE.

    Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE

    Market Indices Data
      Latest Change YTD
    Dow Jones
    11,331.40 75.60 8.66%
    NASDAQ Composite
    2,564.25 14.82 13.00%
    Russell 2000
    747.56 4.42 17.90%
    S&P 500
    1,215.94 9.87 9.04%

     

    ValuEngine Market Overview
    Summary of VE Stock Universe
    Stocks Undervalued
    46.11%
    Stocks Overvalued
    53.89%
    Stocks Undervalued by 20%
    21.79%
    Stocks Overvalued by 20%
    23.17%

     

    ValuEngine Sector Overview
    Sector Change MTD YTD Valuation Last 12-MReturn P/E Ratio
    Basic Materials 2.04% 0.00% 27.36% 22.51% overvalued 60.52% 34.99
    Oils-Energy 1.22% 0.00% 12.95% 20.57% overvalued 42.47% 43.54
    Multi-Sector Conglomerates 2.27% 0.00% 21.00% 10.64% overvalued 32.24% 33.11
    Auto-Tires-Trucks 2.70% 0.00% 45.22% 8.10% overvalued 50.45% 35.25
    Transportation 1.68% 0.00% 21.95% 6.59% overvalued 28.69% 39.75
    Industrial Products 1.50% 0.00% 21.10% 5.39% overvalued 29.40% 27.61
    Retail-Wholesale 0.66% 0.00% 17.14% 5.33% overvalued 59.23% 26.20
    Aerospace 0.42% 0.00% 17.67% 3.50% overvalued 30.81% 19.62
    Utilities 1.32% 0.00% 4.83% 3.37% overvalued 14.96% 27.73
    Consumer Staples 0.73% 0.00% 8.15% 2.61% overvalued 17.51% 22.07
    Computer and Technology 1.42% -0.00% 24.35% 2.52% overvalued 33.14% 41.01
    Finance 1.55% 0.00% 14.35% 1.47% overvalued 14.88% 29.70
    Business Services 2.35% 0.00% 9.03% 1.27% overvalued 21.76% 29.93
    Consumer Discretionary 1.32% 0.00% 19.30% 0.36% undervalued 27.29% 30.85
    Construction 1.83% 0.00% 3.29% 4.84% undervalued 7.58% 37.94
    Medical 0.97% 0.00% 11.62% 7.02% undervalued 15.82% 33.67

     

     
     
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    Disclosure: no positions
    Stocks: HD
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