3. Lowe’s Companies, Inc. (NYSE: LOW)
Number of Hedge Fund Holders: 61
Lowe’s Companies, Inc. (NYSE: LOW) is a home improvement retailer operating in the US and internationally. The company also offers home appliances like microwaves, dishwashers, and related products at its stores and ranks 3rd on our list of the best home appliance stocks to buy.
This May, Truist raised its price target on Lowe’s Companies, Inc. (NYSE: LOW) from $185 to $217, while retaining its Buy rating on the shares. Analyst Keith Hughes commented that the upgrade came in light of robust Q1 earnings and 2021 guidance that seems positive for the company.
In the fiscal first quarter of 2022, Lowe’s Companies, Inc. (NYSE: LOW) had an EPS of $3.21, beating estimates by $0.62. The company’s revenue was $24.42 billion, up 24.13% year over year, beating estimates by $667.62 million. Lowe’s Companies, Inc. (NYSE: LOW) has a gross profit margin of 33.07% and the stock has gained 15.56% in the past 6 months and 21.77% year to date.
By the end of the first quarter of 2021, 61 hedge funds out of the 866 tracked by Insider Monkey held stakes in Lowe’s Companies, Inc. (NYSE: LOW). The total value of their stakes was roughly $5.17 billion. This is compared to 71 hedge funds in the previous quarter with a total stake value of approximately $5.19 billion.
Pershing Square Holdings Ltd, an investment management firm, mentioned Lowe’s Companies, Inc. (NYSE: LOW) in its fourth-quarter 2020 investor letter. Here’s what they said:
“Lowe’s is a high-quality business with significant long-term earnings growth potential. We initiated our investment in the company in April 2018 largely because we believed that the hiring of a new high-caliber management team could dramatically improve the business and close the performance gap to its closest competitor, Home Depot. Marvin Ellison became CEO in July 2018, and immediately began working on a multi-year transformation plan to bolster Lowe’s retail fundamentals, reduce structural costs, expand distribution capabilities, and modernize systems and the company’s online capabilities.
In 2020, Lowe’s experienced unprecedented demand driven by consumers nesting at home, higher home asset utilization and a reallocation of discretionary spend. Lowe’s earlier decision to modernize the company’s online offering allowed it to meet consumers’ surging demand. Further, its commitment to improve the company’s retail fundamentals allowed Lowe’s to showcase its enhanced merchandising, greater in-stock-levels, and excellent customer service. In the fourth quarter, the company completed 95% of its store layout resets which include a more intuitive shopping experience complete with a more Pro-centric layout (by “Pro” we refer to the professional tradesmen that perform repair and maintenance, remodeling and construction services). The company is also rolling out a new Pro CRM tool, which should improve Lowe’s Pro market share.
Management remains focused on a myriad of operational initiatives designed to improve the customer shopping experience and the company’s long-term earnings power. In the near-to-medium-term, these initiatives include improving Lowe’s omnichannel capabilities including simplifying search and checkout features, launching three additional ecommerce fulfillment centers, enabling faster mobile order fulfillment, standing up dedicated store fulfillment teams, rolling out touchless Buy-Online-Pick-Up-In-Store lockers to all U.S. stores by April 2021, and reimagining scheduling and modes of delivery for certain large-format order deliveries (notably, appliances). These initiatives are examples of Lowe’s “Perpetual Productivity Improvement” program which is designed to improve market share and profit margins.
Lowe’s is making important strategic investments to position the business to continue to thrive. The company’s long-term outlook implies significant opportunity for continued earnings appreciation and margin expansion as it executes its multiyear business transformation.”
