We recently compiled a list of the 12 Best Long Term Low Risk Stocks to Buy Right Now. In this article, we are going to take a look at where The Home Depot, Inc. (NYSE:HD) stands against the other long term low risk stocks.
As the DeepSeek craze ignites a sell-off in the tech sector, investors are weighing the implications of the downturn in the long term. This is because the technology sector, particularly the Magnificent Seven group of stocks, has been a significant driver of market gains in the past few years. However, Bank of America strategists caution that these tech giants may face challenges ahead, dubbing them the “Lagnificent 7” due to potential underperformance. Factors such as diminishing US exceptionalism, vast fiscal spending, high immigration, and the AI investment bubble are cited as contributing to this anticipated slowdown. The bank has advised investors to explore undervalued opportunities in sectors like Japanese and European banks, commodities, high-yield bonds, international stocks, and cyclical sectors, given expected rebounds in global manufacturing activity.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
There are also several long term and low risk equities trading on the US stock market that could provide investors with the hedge they need against volatile tech stocks. According to a report by news agency Reuters, looking ahead, investors are cautiously optimistic about 2025, anticipating gains fueled by a solid economy, moderating interest rates, and pro-growth policies from the incoming administration. The S&P 500 has experienced significant growth over the past two years, and corporate profits are projected to rise by over 10% in 2025. However, risks such as persistent inflation, potential policy shifts, and elevated stock valuations warrant careful consideration. Strategies may include diversifying portfolios, focusing on undervalued sectors, and closely monitoring economic indicators to navigate the evolving landscape.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we selected stocks that have solid businesses with recurring revenue streams, reliable dividend payouts, and burgeoning growth pipelines. These stocks are also popular among hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A home improvement store overflowing with a variety of products and supplies.
The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 82
Home Depot, Inc. (NYSE:HD) operates as a home improvement retailer. The recent financial performance and strategic initiatives of the firm underscore its commitment to long-term growth, particularly through enhancing customer experience and expanding its professional segment. In the third quarter of 2024, the company reported sales of $40.2 billion, a 6.6% increase from the same period in the previous year. However, comparable sales decreased by 1.3%, with US comparable sales down by 1.2%. In the second quarter, sales had reached $43.2 billion, a 0.6% increase from the prior year, indicating modest growth. Home Depot aims for sales growth between 3% and 4% per year, maintaining a flat gross margin rate, and achieving operating margin expansion through sales leverage and productivity.
Overall HD ranks 9th on our list of the best long term low risk stocks to buy right now. While we acknowledge the potential of HD as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a stock that is more promising than HD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.