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Buy Home Depot On The Breakout

Apr. 05, 2021 10:28 AM ETThe Home Depot, Inc. (HD)29 Comments


  • HD has just broken out.
  • Shares are fairly valued.
  • Capital returns, higher margins, and comparable sales should power shares higher in the years to come.
The Home Depot Hom Improvement Retail Store Front with Sign
Photo by Lokibaho/iStock Unreleased via Getty Images

Home improvement has been hot for years as consumers have spent their earnings on fixing up their residences. In addition, strong construction for residential and commercial has helped suppliers of building materials, with Home Depot (NYSE:HD) being an

This article was written by

Josh Arnold profile picture

I've been covering financial markets for ten years, using a combination of technical and fundamental analysis to identify potential winners (and losers) early, particularly when it comes to growth stocks.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (29)

ValueOverEverything profile picture
If ever there was a truly never sell stock, HD is it.
bigfish1977 profile picture
Good luck to anyone trying to accumulate HD below 300$ ever again. This move higher was looooong overdue, and it ain't over. Any dip down to 305$ range you better pull the trigger quick. Were in a new trading range folks higher prices ahead.
you buy it BEFORE it breaks out
Not a time to buy at all time high's in a over hyped stock market.

When the real correction appears, there will no doubt be lots of bagholders.
Gary J is Rich on AMZN profile picture
@hangloose Hawaii

Already missed a 2.49% day. Brilliant.
@hangloose Hawaii
what P/E do you predict for HD will be the end result of this "real correction"?
@hangloose Hawaii While dips usually occur quickly, crashes have a tendency to take months to develop, and by then the smart investors should have sold and been long gone.

Back in 2008 people had more than ample time to allocate properly but greed and lack of discipline set in. Buy and holders make that mistake so do the "it will turn back up" crowd. Just freaking sell and wait for a better day but the indexes and the SOXX have not given the signal yet so just ride that wave higher for now.
Michael Dolen profile picture
$HD ecommerce is killing it. I've bought so much from them online these past 13 months. Including their store brand of paper towels and toilet paper, which are better and cheaper than the $AMZN Presto brand I used to buy. Plus, unlike AMZN, HD always has them in stock and I get delivery usually the next morning, for free.

That said, the times in recent years to buy their stock was the selloff on Christmas Eve 2018 and during the covid crash. Those are the times when I bought all mine. Shares are fully valued today, not a good risk/reward. If you want a HD bargain today, just stick to buying their TP that has the cute shar pei on it.
TaiPan profile picture
@Michael Dolen

**$HD ecommerce is killing it**

Ah, colloquial English versus classical English. I thought for a second that you were saying that HD’s e-commerce was killing the actual stores. Silly me.
Gary J is Rich on AMZN profile picture
@Michael Dolen

Agree Presto brand is the best. And always on my doorstep next day.
Gary J is Rich on AMZN profile picture

Makes no sense to me either.
Time to buy was back in February, during the unwanted pullback. I got in February 24, that was $57 ago (plus a divy).
Gary J is Rich on AMZN profile picture

"Time to buy was back in February, during the unwanted pullback. I got in February 24"

Now that's what I call amazing rear window "analysis".
TaiPan profile picture
@Gary J is Rich on AMZN

**Now that's what I call amazing rear window "analysis".**

Unless HD was on his watch list, and when the stock got cheaper he bought in what we all should consider a good move.
@Gary J is Rich on AMZN It’s not “analysis” dummy, just the facts. Clearly not presented as “analysis”.
This stock has to be one of the, if not thee, biggest total return stocks over the past 30 years. I remember in early nineties walking into a ramshackle Home Depot store and wondering what in heck I was looking at. All I could see were people buying lumber, drywall, studs, framing materials and nails/fixings crap.....but yet carts were overfull with other stuff in the store they had also obviously picked up. I watched this mayhem for over an hour and thought this company and store had to be nuts. It was chaos.. And this type of chaos is still rippling across all Europe, Middle East and Asia. It's unreal.....

The best of fortune to us all
Yield 2%
I’m a long saying now to too high to buy
@jimoc I agree, the price broke above that consolidation at about 284. You can even see the major buyers coming in on March 19th. That setup can act as a major catapult resulting in a large upswing in price but now is probably the time to wait for a slight pullback. After that short stint however I believe it goes to 360 range, if not higher.
buy high sell higher is following someone else's idea
@RL+130, mar 5th, i added at 247. A 65 point run in a month is not the time to add imo. Has to pull back but i will just hold and regret not selling at 316 I am sure.
Great management at HD, good for any long term portfolio.
Gary J is Rich on AMZN profile picture
"Use the top of the former trading range as your guide if we get a pullback"

No, forget the market timing guessing nonsense and just buy it.
Long term, fine. Late to the game in the short to medium term, as usual. There have been so many opportunities to buy $HD of recent, but now at all-time high's?
Random_Randy profile picture
@pdrozin It consolidated for so long, so usually there's more places to put your money if your a short term trader.

People like buying the breakout because usually the moon is the limit. My son works as a merchandiser for $CENT who services $HD and $LOW and he said the company cultures are way different.

Made me start position in $HD at 270.
TaiPan profile picture

**... he said the company cultures are way different.**

Do you have the time to elaborate?
@Random_Randy it did? Straight up
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