Is Home Depot’s Stock a Buy Now?

With shares of The Home Depot (NYSE:HD) trading at around $61.57, is Home Depot an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Writing about companies like Home Depot is enjoyable because it’s 90 percent good news. This has been the second-best performing stock in the DJIA for 2012, which has had a lot to do with the rebound in the housing market.

Housing Starts just came in at 861,000, which is well below the number needed to indicate a healthy market, but much higher than 478,000, which we saw at the height of the financial crisis. Home prices are up 5.6 percent YoY, existing home sales just increased by 5.9 percent, and Hurricane Sandy presents an excellent opportunity Home Depot.

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Usually, negatives for a company are written here, but there aren’t enough negatives to cover. However, there are two more positives. Home Depot just raised guidance, and it announced that it will repurchase $700 million of outstanding shares.

Let’s see if the numbers are just as impressive as the news.