Jim Cramer’s New Picks: 5 Stocks to Buy

2. Lowe’s Companies Inc (NYSE:LOW)

Number of Hedge Fund Investors: 68

When a caller asked Jim Cramer whether he should sell Lowe’s Companies Inc (NYSE:LOW) stock because of its declines, Cramer’s reply was a resounding “No.” Cramer said Lowe’s Companies Inc (NYSE:LOW) CEO Marvin Ellison has been doing a “good job.”

“I do not want you to sell Lowe’s right here.”

Last month, Wells Fargo analyst John Sheehan published his list of high-quality, dividend-paying blue chip stocks that have stood the test of time. Lowe’s Companies Inc (NYSE:LOW) was part of this list.

Aristotle Capital’s Value Equity Strategy stated the following regarding Lowe’s Companies, Inc. (NYSE:LOW) in its first quarter 2024 investor letter:

“During the quarter, we sold our positions in Phillips 66 and Sysco and invested in two new positions: Lowe’s Companies, Inc. (NYSE:LOW) and TotalEnergies.

Based in North Carolina, and with a history dating back to 1921, Lowe’s Companies is the world’s second-largest home improvement retailer (after Home Depot). The company operates more than 1,700 stores in the United States that offer a wide variety of products to enhance a home, from plants for the garden and house décor to hardware and appliances. Often located in suburban areas, Lowe’s stores primarily serve retail “do-it-yourself” customers (~75% of revenue) and sell products that are used for home maintenance and repair (over 60% of revenue). This contrasts with Home Depot, whose stores have a higher presence in metropolitan areas and cater more to professional customers.

We had previously been investors in Home Depot. Over much of the past decade Home Depot had, in our opinion, executed better than Lowe’s—expanding its presence with large professional customers and increasing its store productivity. However, with Lowe’s hiring of former Home Depot executive Marvin Ellison in 2018, we believe Lowe’s has started the process of closing the gap to better compete with its nearest rival…” (Click here to read the full text)