With shares of Lowe’s Companies (NYSE:LOW) trading at around $38.58, is LOW 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
Lowe’s seems to be at the forefront of a new boom. The refinance boom has already been taking place for a while, but a new boom has now begun. It’s being referred to as the renovation boom. Since there is a low supply of homes, people are putting money back into their own homes. If this trend continues, then Lowe’s will be one of the biggest beneficiaries. According to the Joint Center for Housing Studies at Harvard University, spending on home improvement in 2013 is expected to increase by 10.6 percent in Q1, by 16.8 percent in Q2, and by 19.7 percent in Q3. This doesn’t by any means indicate that these predictions will be correct, but it is a sign of increased confidence.
As far as the title of this article goes, it pertains to Lowe’s announcing that it will hire 45,000 seasonal associates ahead of the spring season as well as 9,000 permanent part-time positions. When a company is hiring at this rate, it’s a sign of strong health.
Let’s take a look at some important numbers for Lowe’s…