02. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 86
The Home Depot, Inc. (NYSE:HD) is a leading home improvement retailer with a robust presence both in the United States and internationally. The company’s extensive product offerings encompass building materials, home improvement goods, and installation services, making it an essential player in the hurricane and natural disaster stocks category. As natural disasters increase in frequency and intensity, the demand for home repair and renovation products and services is likely to rise, positioning The Home Depot, Inc. (NYSE:HD) for sustained growth.
In its Q2 2024 earnings call, The Home Depot, Inc. (NYSE:HD) reported earnings per share (EPS) of $4.67, exceeding analyst expectations of $4.53, showcasing the company’s resilience in a challenging economic environment. Despite a reported sales decline of 3.3% from the previous year, the company generated $43.2 billion in sales, indicating strong operational capabilities and a loyal customer base. This decline was largely influenced by higher interest rates and macroeconomic uncertainties that affected consumer spending across home improvement projects, particularly during the softer spring season impacted by extreme weather.
Notably, The Home Depot, Inc. (NYSE:HD) has been proactive in expanding its market share, currently holding about 17% of the $1 trillion home improvement market. The recent acquisition of SRS Distribution adds significant value to its product offerings, particularly in roofing and landscaping, allowing the company to enhance its services and drive cross-selling opportunities. The integration of SRS is expected to bolster revenue growth through innovative product offerings and improved customer credit options.
The company’s online sales also saw an increase of approximately 4%, indicating a successful transition toward digital platforms, which is crucial for capturing the growing e-commerce segment. The improvement in fulfillment options, including a partnership with Instacart, further enhances the customer shopping experience.
Additionally, there are 86 hedge fund holders as of Q2 2024, up from 70 in the previous quarter, signaling growing institutional confidence in The Home Depot, Inc. (NYSE:HD). This increasing institutional interest reflects a positive outlook for the stock, reinforcing its potential as a strong contender in the hurricane and natural disaster sector. With its strategic investments and commitment to customer service, The Home Depot, Inc. (NYSE:HD) is well-positioned for long-term growth and profitability.
Diamond Hill Large Cap Concentrated Strategy stated the following regarding The Home Depot, Inc. (NYSE:HD) in its Q2 2024 investor letter:
“Other bottom Q2 contributors included Caterpillar and The Home Depot, Inc. (NYSE:HD). Similarly, home improvement retailer Home Depot faces growing concerns about the consumer spending environment — particularly for home improvement expenditures. However, we believe the company’s long-term prospects and multi-year fundamental outlook are unchanged.”
