Why Shadow Inventory Doesn’t Matter for These Stocks: The Home Depot, Inc. (HD), Wells Fargo & Co (WFC), Bed Bath & Beyond Inc. (BBBY)

Bed Bath & Beyond Inc (NASDAQ:BBBY) – Trading at just 11 times forward earnings estimates, this company makes a mint when buyers move into their new digs. The company sells everything from furniture to home décor products, which makes it perfectly exposed to higher home sales and more movement among American homeowners. Impressively, this debt-free company has carved out a niche that allows it to generate excess economic profits. The company plans to expand to 1,300 North American stores, giving it organic growth on top of the surplus profits to be had in an environment with improving home sales.

Don’t make a common investing mistake of chasing only the direct plays in a particularly industry.

While increased home activity may point to homebuilders, these three names above have a track record of strong performance with or without the tailwinds of housing. For now, the tailwinds only make these fantastic names even better. Where good companies meet a good macroeconomic environment, investors prosper.

The article Why Shadow Inventory Doesn’t Matter for These Stocks originally appeared on Fool.com and is written by Jordan Wathen.

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