Home improvement stores have been a rare exception among retailers in the first half of the year, take advantage of stay-at-home orders aimed at curbing the spread of COVID-19. With new free time, with unexpected stimulus checks and temperate spring, many consumers have made the most of the situation by the embellishment of their homes.
For the future, consumers fill out must-yourself (DIY) projects, coupled with a catch-up housing demand, look like they will be home support spending in the second half of the year. In addition, a growing number of people who move away from the city in search of affordable living lends itself more to the home improvement store visits, they decorate their new homes.
The three home improvement stocks are, as described below, all operations in the vicinity of their 52 weeks, only a few months after setting fresh 52 weeks low. We will take a more detailed look at each retailer and discuss several tactics of trading ideas.
The Home Depot, Inc. (HD)
Dow component The Home Depot, Inc. (HD) operates as a home improvement retailer, targeting DIY and professional customers. Although the Atlanta-based company’s bottom line contracted by 8% in the first quarter due to the worsening of costs, its revenue for the period increased by 7% due to the strong interconnected sales through its warehouse stores and digital channels. Home Depot stock has a $268.83 billions of dollars of market capitalization, offers a 2.49% dividend yield, and is trading at 52.42% over the past three months of 17 June 2020.
A recent pullback in the stock offers a buying opportunity at the $240 level, where the price of the meetings in support of the February high. As a gold cross, indicates that a new trend is in place traders should consider using a trailing stop to let profits run. To implement this trade, management strategy, place an initial stop order below the June 15 low at $234.31 and the address under each of the movements lower.
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Lowe’s companies, Inc. (LOW)
Lowe’s companies, Inc. (LOW) operates as a home improvement retailer in North America, selling a range of products for the construction, maintenance, repair, renovation and decoration. Earlier this month, Gordon Haskett analyst Chuck Grom upgraded the retailer’s stock to “Buy” from “Hold”, stating that consumers will be to invest in DIY projects for the next several quarters, adding that the recent collapse of the housing market will likely be short-lived. On the earnings front, Lowe’s, which emits a 1.72% dividend yield, has exceeded the expectations of Wall Street for the past four consecutive quarters. Lowe’s shares have jumped 82.24% over the last three months, superior of the house improvement of the industry average during the same period of 22% with effect from 17 June 2020.
The home improvement retailer’s stock has made a remarkable V-shaped recovery, the last month, recording a new all-time high in the process. More recently, a wave of profit taking eased this week at a cost of $ 125 – an area on the map that is located from the pre-pandemic high. Traders who buy at these levels should place a stop-loss order below the June low at $123.09, while establishing a profit target at least three times the risk. For example, if you use a $9 stop, the target of $27 of the increase.
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Floor & Decor Holdings, Inc. (FND)
Floor & Decor Holdings, Inc. (FND) specializes in a variety of tiles, wood, laminate, natural stone and flooring products decorative and mounting accessories. Despite several store closures due to the crisis of the health, of the $5.79 billion hard surface flooring retailer reported first-quarter top-and bottom-line growth of 16.3% and 20.7%, respectively, thanks to a successfully on the sidewalk on the collection of collections. As of June 17, 2020, the Floor and Decor stock has climbed 27% over the last month, and nearly 90% in the last three months.
Floor and Decor shares have shown an upward trend since the beginning of April, with the stock crossed above its 200-day simple moving average (SMA) in mid-May. This week’s retracement in a closely monitored, a horizontal trend line at $51 provides a high probability entry point to the crucial support. In addition, buyers can benefit from a short-covering rally, given that nearly 10% of the company’s float is held short. Consider booking profits by using a 20-day moving average (green line) as a trailing stop. For example, the output of the transactions on the first close below the indicator.
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Source: investopedia.com
