4. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 68
The Home Depot, Inc. (NYSE:HD) operates as a home improvement retailer. It operates The Home Depot stores that sell various building materials, home improvement products, lawn and garden products, and décor products. The stock offers a forward dividend yield of above 2.0% and is also relatively undervalued, making it stand among the top cyclical stocks for inflation. Moreover, The Home Depot, Inc. (NYSE:HD) has a cyclical business model which enables it to transfer high costs to consumers in the form of price hikes.
This January, Truist analyst Scot Ciccarelli assumed coverage and upgraded The Home Depot, Inc. (NYSE:HD) to Buy from Hold with a price target of $448, up from $420. The analyst sees upside to stock, citing key home improvement growth drivers being supply and demand imbalances in the housing market, behavioral changes due to the pandemic, and aging housing infrastructure. The analyst further told investors that he sees the stock gaining more market share as we progress into 2022 from its size and scale benefits and enhanced supply chain capabilities.
This February, The Home Depot, Inc. (NYSE:HD) released its earnings report for the fiscal fourth quarter of 2021 in which the company beat both EPS and revenue estimates. The company registered an EPS of $3.21, beating expert estimates by $0.03. Moreover, the company reported quarterly revenues of $35.72 billion, up 10.72% year over year, and outperformed market consensus by $873.49 million.
On February 22, 2022, The Home Depot, Inc. (NYSE:HD) announced that its board of directors increase its quarterly dividend by 15% to $1.90 per share, which brings the company’s annual dividend to $7.60 per share. The dividend was payable on March 24 to investors of record on March 10.
By the end of the fourth quarter of 2021, Insider Monkey spotted The Home Depot, Inc. (NYSE:HD) on 68 hedge fund portfolios, which had total stakes of $6.08 billion in the company. This is compared to 58 positions in the preceding quarter with stakes worth $4.38 billion. The hedge fund sentiment for the stock is positive.
Ken Fisher’s Fisher Asset Management is the dominating shareholder in The Home Depot, Inc. (NYSE:HD), as of December 31, 2021, owning over 7 million shares of the stock. According to Insider Monkey’s data, Fisher Asset Management’s stakes in the company stand at $3.2 billion as of the end of last December.
ClearBridge Investments, an investment management firm, published its first-quarter 2022 investor letter in which it mentioned The Home Depot, Inc. (NYSE:HD). Here is what the firm had to say:
“Other actions during the quarter included the sale of consumer name Home Depot (NYSE:HD). The Home Depot move is based on where we are in the consumer and housing cycle as we come out of a period of nesting and dedensification and as government stimulus related to COVID-19 expires. The company has effectively pulled forward demand over the last two years and taken share because of in-stock inventory availability relative to peers. Many of those tailwinds are now turning neutral to negative and our thesis for Home Depot of optimizing the business in terms of merchandising/inventory, omnichannel, PRO/DIY mix, labor and distribution centers has played out. The exit is part of our efforts to reduce consumer discretionary exposure and provide better downside protection if volatility persists.”
