5 Best Retail Stocks for 2021

2. The Home Depot, Inc. (NYSE: HD)

Number of Hedge Fund Holders: 68

The Home Depot, Inc. (NYSE: HD) is a home improvement retailer operating the Home Depot stores selling building materials, home improvement products, lawn and garden products, and décor products, among other services. The company ranks 2nd on our list of the best retail stocks for 2021

As of the 21st of June, The Home Depot, Inc. (NYSE: HD) is among the top consumer stock picks for J.P. Morgan as well. In the first quarter of 2021, the company’s EPS was valued at $2.08, and its revenue came in at $28.26 billion, representing year-over-year growth of 7.12% and beating estimates by $685.97 million. The Home Depot, Inc. (NYSE: HD) has a gross profit margin of 33.94% and has gained 15.65% in the past 6 months and 18.23% year to date.

By the end of the first quarter of 2021, 68 hedge funds out of the 866 tracked by Insider Monkey held stakes in The Home Depot, Inc. (NYSE: HD), worth roughly $4.35 billion. This is compared to the previous quarter’s 79 hedge fund holders with a total stake value of roughly $4.92 billion.

Ensemble Capital, an investment management firm, mentioned The Home Depot, Inc. (NYSE: HD) in their first quarter 2021 investor letter. Here’s what they said:

“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 view the complete text)