Jim Cramer’s Ultimate Stock Picks: 10 Hot Stocks to Consider

5. The Home Depot Inc. (NYSE:HD)

Number of Hedge Fund Investors: 86

Jim Cramer highlights The Home Depot Inc. (NYSE:HD) as another stock that could benefit from the Federal Reserve’s upcoming rate cuts.

“Another stock that fits the Federal Reserve’s rate-cutting cycle: Home Depot. At Thursday’s Club meeting, we took an in-depth look at why we started a position.”

The Home Depot, Inc. (NYSE:HD) offers a promising investment opportunity due to its strong earnings, strategic market position, and favorable economic conditions. The Home Depot, Inc. (NYSE:HD)  recently reported better-than-expected Q2 2024 earnings, with EPS of $4.67 and revenue of $43.18 billion, exceeding analyst forecasts despite rising costs and inflation. Although The Home Depot, Inc. (NYSE:HD)’s annual revenue guidance for FY 2024 is slightly below expectations, it remains solid given the current economic climate.

Analysts are optimistic about The Home Depot, Inc. (NYSE:HD)’s future, especially if the Federal Reserve lowers interest rates, which could increase consumer spending on home improvements and boost renovation demand. Additionally, The Home Depot, Inc. (NYSE:HD)’s strong presence in the professional market gives it a competitive edge by capturing high-margin business from contractors. The Home Depot, Inc. (NYSE:HD)’s dividend yield of around 2.56% adds appeal for income-focused investors.

With its robust financial performance, strategic advantages, and potential benefits from improving economic conditions, The Home Depot, Inc. (NYSE:HD)  is well-positioned for continued growth, making it an attractive investment.

Polen Focus Growth Strategy stated the following regarding The Home Depot, Inc. (NYSE:HD) in its Q2 2024 investor letter:

“In the second quarter, the top relative contributors to the Portfolio’s performance were all names we do not hold: The Home Depot, Inc. (NYSE:HD), Meta Platforms, and AbbVie. With Home Depot, much of the quarter’s weakness came in April, as a higher-than-expected inflation reading caused investors to question the likelihood of imminent rate cuts in 2024. Given Home Depot’s sensitivity to interest rates, as it relates to home improvement projects, the stock sold off in the period.”