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Hey guys….been very busy (sorry I haven’t been around)…but I seem to have misplaced a post. I can’t remember who I was talking to…but I remember telling them that Home depot would have financial problems within 3 years…was a couple years ago…and I can’t find the post… *G* oops…shouldn’t rub it in i guess…but it got me laughing….Hope business is better for all of you…and lets all pray for this middle east thing to settle down huh?
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Hi Lawrence
I thought I heard HD was blaming low lumber prices for less than exoected earnings this quarter.
I don't know how much they pressure their suppliers but today the local store was removing all of its' Carlon electrical boxes and replacing with Pass and Seymour.
*You did start an interesting thread, Lawrence. Home Depot
*So, if it hits $35 shall I buy?
*Jeez, I just checked and its already under $35.
*Stock split maybe? They've been known to do the 5 for 3 before.
*There's been nothing in the business section of the paper I read every morning one way or another about Home Depot. I think their stock has been hovering in the mid-50's for a while. My brother was hoping the stock would go down a little so he could buy a few extra shares. This ought to make him happy (or not, since he works part-time for HD in Jersey).
*Thought there was another one....little earlier... the guy was pretty irate that I insinuated HD would have financial trouble someday... reacted like it was a rediculous thought. If in the good times...they can't meet expected profits...what will happen in the bad. Guys...Invest in things you feel are safe...that is all you can do. But be careful....L
*HD dropped because they warned of profits not hitting forecasts in the second half of this year, blaming higher gasoline prices and lower prices for lumber. It basically says they won't do as well as exected but you can be sure their earnings will beat last years. Btw, it seems many, many stocks are finally getting hammered. Look at the once almighty ATT.Financial trouble? Hardly. When was the last time anyone was in a HD? I avoid the place because there's nowhere to park...the darned place is always packed.
*There's alot of low priced contracotors that are busy all the time and still going broke. Busy doesn't necessaryly mean making money.
*No it doesn't, but Busy + Profit on each sale = PROFIT.They do their best not to sell at a loss...
*b WBA At You Service What I can't figure out are the small time contractors I see in there at 9AM with a load of about 1000 bd ft of framing lumber (all different sizes) jammed into a cart waiting in a line of about 10 people. It's always two guys together waiting. We must have 20 lumberyards here that deliver for free. Is their planning that bad ? I doubt HD's lumber prices are that good even though they should be for the scrap they sell.
*Ken and Rick are right. HD will make $.28/share this quarter vs. $.25/share last year. HD is and is expected to be profitable. The reason HD lost market share is that the expectations of future profits were reduced (they were expected to make $.31/share this quarter). It's no secret that Greenspan has both feet on the brakes, it has just taken a little while for its effects to be felt. When combined w/ the increases in oil prices (the uncertainty in Israel and Yemen don't bode well for a reduction in oil prices any time soon)these factors have a slowing effect on the economy. For a cyclical industry like homebuilding, any reduction in the economic outlook will result in a reduction in the price of cyclical stocks.-Lee
*Tim, I've never been in a HD to tell what kind of "Scrap" wood they deal in, but their big competitor in the east is "Lowe's" and their lumber is hands down better quality than ANY of the dozens of regular lumber yards in my area. Would rather spent 20 minutes in line for straight framing lumber than spend extra hours in the field trying to make straight walls out of the crap that the yard picks to deliver to you free (Nothin's free by the way). Perhaps they do deliver better lumber to big builders, but I'm a small fish...
*Yea, I think it's pretty strange to that anyone except a guy building a deck in his yard would buy framing lumber there. I get my glulams at HD though, cheaper than my favorite local, 'Woodinville Lumber' but lumber at woodinville is about $340/MBF vs $450/MBF at HD. HD is good if it's 3PM on a sunday and you need some sticks.
*My theory...now this is just my theory, but a company that leverages it's expansion money from investors on the stock market, when it has it's value pinched, often runs into cash flow problems. When that happens...it is normally the beginning of the end. A takeover or creditor protection application often follows if it doesn't rebound quickly. Basically i have been in recession mode, thinking conservatively, (here in Canada), for nearly 3 years now. When the DJ and the local indexes are in record high territory...it is not going to last forever. I am no doomsayer...I just wish people wouldn't overeact so heavily. Be careful gents...we have all (well...most of us), have seen this kind of cycle before. The hot doggers that are betting the farm that the boom will last forever are a danger to all of us...I have...and will continue to stay away from them..But then...I could be totally wrong! ;o)L
*My daughter sent me (through HD's Internet site) four ten dollar gift cards for last Father's Day. I've been holding them all this time against an increase in value. Or do I have this wrong? I guess I'll never figure out this stock thing.
*Sell!!! Selll!!!
*Adrian if you are selling I am buying.Lee I I think you are mixing up market share with market capitalization.Lets see, over the last three yearsRevenues have doubled.Earnings on those revenues are up approx 2.5 times.Their margin on sales has increase from 8% to 10%.Long term debt is down by about 40%. Projected growth over the next 5 years is 25% per year, approx 3 times the I & I 500.and so on.The value that the stock market puts on a company on any given day is not necessarily reflective of it's true value as a long term investment. All you have to do is look at the value the market put on the .coms over the past few years to see my point.
*Correction on last message I & I 500 should be S & P 500
*Stray, there's a lot of truth to that small fish story. If i'm framing a 2000 foot house, I'll get pile run, but I get the entire bunk!If your order twenty studs from a yard that allows retail customers, you get the top twenty, the ones that were culled! It ends up being faster to pick the stuff up yourself. blue
*Scott, I was kidding. If I had HD, I wouldn't sell; it's a moneymaker. I don't like what they are or represent though, so I wouldn't buy 'em in the first place.
*Scott - You're correct and I misspoke on the market share point. I should have said "cap or value". I think that we basically agree that HD is and will continue to be a profitable company.I disagree that the value the market puts on a company "on any given day" is not reflective of that company's worth. Yes there may be a range of mispricing, but it is the market's best estimate of that company's worth with the information currently available. HD and the .coms are very different entities. However, a substantial portion of a company's equity value is based on that company's earnings in perpetuity (often at least 80% of total value). This is what is driving the .com valuations since most are not likely to be profitable in the next five years. As the expectations in perpetuity change (e.g. changes in technology, the competitive landscape, government oversight, or the economy), the expected value of a company can change dramatically (e.g. Microsoft anti-trust trial.)-Lee
*Lee...Microsoft is going after the entire business world with it's Net initiative...If the courts don't limit it's use of it's software to steal all the markets it services with software, then we will see the first trillionare and quadrillionare...XML and it's MSN site hooked to all the leading net sites is the killer idea they have come up with. IT's in operation as I type...Go to MSN...click on a story that's to do with your home..and you end up at MSN's home related site with improvement.com to pick one of us to be your contractor!..A fee goes to MSN...Gates wants a transaction fee from all transactions on the planet..Mastercardlike...he is building the world as transacted through Gates and company...MSCARD...GATESCARDS...GATE-WAYS..near the stream thinking Gates is just at a little bump in the road ahead,aj
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Hey guys....been very busy (sorry I haven't been around)...but I seem to have misplaced a post. I can't remember who I was talking to...but I remember telling them that Home depot would have financial problems within 3 years...was a couple years ago...and I can't find the post... *G* oops...shouldn't rub it in i guess...but it got me laughing....Hope business is better for all of you...and lets all pray for this middle east thing to settle down huh?