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Gabalex Capital’s Top Stock Picks For Q4

#3 Home Depot Inc (NYSE:HD)

Shares Owned by Gabalex Capital (as of September 30): 275,000 shares

Value of Holding (as of September 30): $31.76 Million

Moving on, shares of home improvement retailer Home Depot Inc (NYSE:HD) have had a nice run in 2015. After witnessing a significant surge during the first two months of the year, they remained in a range through the next six months, but again rallied in October and are now up more than 20% year-to-date. The company is scheduled to report its third quarter earnings on November 17 and analysts expect the company to declare EPS of $1.22, $0.09 better the $1.13 it reported for the same quarter last year. On September 16, analysts at Oppenheimer reiterated their ‘Outperform’ rating and $133 price target on the stock. First Eagle Investment Management became heavily bullish on Home Depot Inc (NYSE:HD) during the third quarter, more than tripling its holding in the company to almost 1.2 million shares.

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 #2 Wal-Mart Stores, Inc. (NYSE:WMT)

Shares Owned by Gabalex Capital (as of September 30): 500,000 shares

Value of Holding (as of September 30): $32.42 Million

It seems the continuous dismal performance of the stock of the world’s largest retailer Wal-Mart Stores, Inc. (NYSE:WMT) shook Gabalex Capital’s faith in the company a little bit as the fund sold 16% or 100,000 shares of the company during the third quarter and brought its total holding in it down to 500,000 shares. After losing 8% during the third quarter, the stock of Wal-Mart Stores, Inc. (NYSE:WMT) suffered its sharpest decline in 25 years on October 14 after the company warned investors that its earnings could decline by as much as 12% next year due to higher wages, lower prices and spending on e-commerce. The company declared mixed fiscal 2015 third quarter results, reporting EPS of $1.08 on revenue of $120.20 billion. Richard Pzena’s Pzena Investment Management reported holding 6.32 million shares of Wal-Mart as of the end of September.

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#1 W W Grainger Inc (NYSE:GWW)

Shares Owned by Gabalex Capital (as of September 30): 180,000 shares

Value of Holding (as of September 30): $38.702 Million

Finally, even after its stock having suffered a 8.67% decline during the third quarter and Gabalex Capital leaving the stake unchanged, the maintenance and repair supplies distributor W W Grainger Inc (NYSE:GWW) continued to remain the fund’s top stock pick at the end of the third quarter. Recently on October 16, the stock declined by more than 5% in a day after it reported its fiscal 2015 third quarter earnings. While analysts had expected W W Grainger Inc (NYSE:GWW) to report EPS of $3.06 on revenue of $2.55 billion, the company declared EPS of $3.03 on revenue of $2.53 billion. For the same quarter last year the company had reported EPS of $3.30 on revenue of $2.60 billion. On October 20, analysts at Credit Suisse reiterated their ‘Outperform’ rating on the stock, while reducing their price target on it to $232 from $292. Israel Englander‘s Millennium Management initiated a stake in W W Grainger during the second quarter by purchasing 36,633 shares.

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Disclosure: None

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