Lowes Companies Inc. (LOW)

Likes the home improvement space. All the vacation money has gone into the home. He prefers Home Depot. Their numbers looks better than Lowes'. He owns neither. Post-covid, he thinks the trend will continue.

Home Depot vs. Lowes He's come close to buying HD in the past. It pays a 2.1% yield vs. Lowes' 1.3%, and HD boasts better metrics elsewhere. Key point it that scale matters in this business, and the 3x bigger HD enjoys a size advantage and has a wider moat (can get better pricing and service from suppliers). He picks HD.

They currently have an effective business plan to reduce costs and close their profitablility gap with Home Depot. Also, they are driving volume to their website, and making more attractive their offerings to professional builders and renovators. The neighbourhoods they service are seeing the most robust economic performance, which is a big change. Historically, Home Depot used to benefit from its exposure to big cities, which has suffered from recent lockdowns. Therefore, Lowes offers better upside than Home Depot given store locations. (Analysts’ price target is $181.44)

She would consider buying both. LOW-N brought in a new management team with a lot of self-help initiatives to closed the gap, but HD-N has also been very strong and both are a home-run in the area. The recession just keeps getting pushed out

Expectations for results on Wednesday are low. Selling lots of lumber products and lumber prices being down means they get less revenue. He owns HD-N. LOW-N has been a turnaround and catch-up story. They have done a good job so far.

This looks great, just like Home Depot. You can enter it here, though hold it if you own.

(Past Top Pick April 17, 2018, Up 15%) Them and Home Depot occupy half the home improvement market. Secular tailwinds are attractive. Handyman skills are declining among consumers, so Lowe's business of sending contractors to houses is growing (and buying supplies for these projects from Lowes). Big share buybacks and heavy free cash flow. Good balance sheet. If there's an economic downturn, yes, their business will get hit, but Lowes will sustain this rough patch.

There's a growing transition to do-it-for-me as society ages. so their in-house contracting business is growing and--guess what--they'll buy Lowe's products. Lowe's has been a little behind Home Depot in growth, but Lowe's is cheaper with more upside with lots of free cash flow. (Analysts' price target $105.86)

(A Top Pick Oct 13/16, Up 24%) HD-N is the number one player. He thinks if there is room for improvement here then he would go into this one. It does not have the premium valuation of HD-N.

They have strong management and good cash flows. The price has come down but she does not recommended adding it. It will be challenging next year. We need to see a lot more new housing construction. It will do well and at least keep up with the market, however.