5 Home Improvement Stocks to Buy Now

In this article, we will be looking at 5 home improvement stocks to buy now. If you want to see some other top picks in this group and read our discussion on the home improvement sector, go directly to 10 Home Improvement Stocks to Buy Now.

5. Floor & Decor Holdings, Inc. (NYSE:FND)

Number of Hedge Fund Holders: 30

Floor & Decor Holdings, Inc. (NYSE:FND) is a multi-channel specialty retailer of hard floor surfaces like laminate, stone, tile, and vinyl, along with their accessories. The company has 166 stores based on the warehouse format with an average size of 78,000 square feet, which is significantly higher than its industry peers. The warehouse format allows Floor & Decor Holdings, Inc. (NYSE:FND) to have a diverse portfolio of products and enough space to display the offerings attractively to its customers.

Experts believe that given Floor & Decor Holdings, Inc.’s (NYSE:FND) price leadership position in the market, the company could see its top line grow at a conservative estimate of 20% annually. Floor & Decor Holdings, Inc. (NYSE:FND)  intends to increase its store coverage three-fold from its current footprint and increase its operating margins into the high-teens.

Here’s what Headwaters Capital said about Floor & Decor Holdings, Inc. (NYSE:FND) in its Q1 2022 investor letter:

“Floor & Decor (“FND”) -38%. The sell-off in Floor and Décor was driven by general concerns around slowing consumer discretionary spending as stimulus benefits wane and consumers shift their spend toward services. More specifically, there is also concern that slowing home sales due to higher mortgage rates will negatively impact home remodel spending. I believe a lot of this remodel concern is misplaced given that the US housing stock continues to age and consumers are sitting on record levels of home equity due to recent home price appreciation, which should support continued strong remodel activity. As of FND’s analyst day on March 14th, management had not yet seen signs of slowing consumer spending given that the company reiterated guidance for same store sales growth of at least 10% for 2022. FND is currently trading at a 20% discount to its pre-COVID multiple, which represents an attractive valuation for a competitively advantaged specialty retailer with a long runway for new store growth.”

Floor & Decor Holdings, Inc. (NYSE:FND) was held by 30 hedge funds at the end of Q2 2022.