The Home Depot Inc., #HD [NYSE]
Services, Retail sales, USA

Financial performance of the company:

Index – DJIA,
S&P 500; Beta – 0.91;
Capitalization – 165.39 В;
Return on asset - 16.20%;
Income - 6.34 B;
Average volume – 6.14 М;
P/E - 23.85;
ATR – 2.62.


Analytical review:

  • The company ranks the fourth on capitalization in the sector of “Services” among the issuers traded in the American stock market.
  • At the end of February the company reported for Q3 of the fiscal year 2016. According to the company’s press-release in the reporting period net profit of the company fell by 22.9% (from 2.23 billion USD to 1.72 billion USD). The decline in EPS ((earning per share) was over 21.5% from 1.73 USD to 1.35 USD.
  • Management of the company said at the press-release that company’s revenue fell by 12% to 21.82 billion USD due to strong USD. It is worth noting that despite pressure from strong USD net profit of the company rose by 17.8% in the fiscal year of 2015.
  • It is expected that retails sales will be growing until the fiscal year of 2017 due to introduction of new products. At the moment “The Home Depot Inc.” holds the largest share in the market (over 18%), which is by 3% more that the nearest competitor.
  • The rise in the price of the company is supported by the recovery of the housing market in the USA.
  • Most of the largest investment funds and banks (UBS, Deutsche Bank, Argus) believe the price of company’s stocks will go up to 140 USD.

Summary:

  • Despite negative report for Q3 of the fiscal year 2016, the company has growth potential. Recovery in the housing market, expansion of the product range and the increase of the market share will boost the rise in the volume of sales. The company has the highest profitability ratio (over 88%) among its competitors. The largest investment funds expect that shares of the company will grow.
  • It is likely that in the near future company’s quotes will go up.

Trading tips for CFD of The Home Depot Inc.

Medium-term trading:
the moment the issuer has broken resistance level of 130.00 USD. If the price maintains at the gap of 128.35-130.00 USD and in case of the respective confirmation (such as pattern Price Action), we recommend to open long positions. Risk per trade is not more than 1.5% of the capital, due to strong volatility. Stop order can be placed slightly below the signal line. Take profit can be placed in parts at the levels of 133.50 USD, 136.00 USD and 138.50 USD with the use of trailing stop.


Analytical review of the stocks of The Home Depot Inc.

Short-term trading: on the chart with the timeframe 15M the issuer has broken the local resistance level of 130.40 USD and consolidated above it. If the price maintains “mirrored” support level 130.40 USD, it will be advisable to open long positions. Risk per trade is not more than 2.5% of the capital. Stop order can be placed at the level of 129.80 USD. Take profit can be placed in parts at the levels of 132.00 USD, 133.50 USD and 135.00 USD with the use of trailing stop.


Analytical review of the stocks of The Home Depot Inc.




The material published on this page is produced by LiteForex and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.



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