3. The Home Depot, Inc. (NYSE: HD)
Number of Hedge Fund Holders: 68
The Home Depot, Inc. (NYSE: HD) is a home improvement retailer that deals in products related to décor, furnishing, gardening, and construction. Along with this, the company also offers services related to home improvement. As of 2021, it has over 2,298 stores located in the U.S., Canada, and Mexico. The online store of The Home Depot, Inc. (NYSE: HD) currently has over 1 million products.
The first-quarter earnings of The Home Depot, Inc. (NYSE: HD) beat the analysts’ expectations due to increasing demand for improvement projects. The net earnings for the quarter were recorded at $4.1 billion, up from $2.2 billion during the same period last year. The EPS of $3.86 beat the market consensus by $0.78. Comparable sales also grew by 31% globally. Building material and décor accounted for $13.6 and $11.8 billion of the gross revenue, respectively. Moreover, the company’s online platform also grew by 27% and represented 14.3% of the net sales.
Recently, many investment banks raised their price targets on the HD stock, such as Loop Capital, Credit Suisse, and Truist. Following the strong first-quarter results, JP Morgan also raised its price target on HD to $345, with an ‘Overweight’ rating on the shares. The HD stock has gained $23% year to date.
At the end of Q1, 68 hedge funds tracked by Insider Monkey have positions in The Home Depot, Inc. (NYSE: HD), worth $4.3 billion.
Ensemble Capital recently released its first-quarter 2021 investor letter and mentioned The Home Depot, Inc. (NYSE: HD) and other stocks in it. Here is what the firm has to say about HD:
“Notable contributors to the Fund’s returns this quarter (included) Home Depot. Home Depot (8.9% weight in the Fund) continued to benefit from a red-hot housing and home improvement market, delivering record financial performance in 2020. As a high return on invested capital business, any step-up in growth results in considerable shareholder value creation. While 2021 comparable sales may not yield impressive headline results, we believe there are several secular tailwinds supporting continued housing investment, including millennials entering prime household formation/peak earnings years, relatively low interest rates, and government policies.
Home Depot (8.9% weight in the Fund): The big orange sign of Home Depot is a familiar sight for homeowners across the country. Despite the rise of Amazon, Home Depot has generated outstanding results for shareholders during the rise of eCommerce, even as Home Depot’s end market in housing suffered the worst collapse in a century. Over the last fifteen years, a period which began at the peak of the housing bubble, Home Depot’s stock has generated annual returns of 17% a year, outperforming the S&P 500 by approximately 7% a year…” (Click here to see the full text)
