Filed under: Rants and raves, Home Depot (HD), Lowe’s Cos (LOW), Presidential elections, Headline news, Stocks to Buy
The first major economic act of presidential hopeful Barack Obama will be to add Hillary Clinton to the lower half of the democratic ticket. If he does not, he will be throwing caution to the wind.
All indications are that he does not want to do this and hopes he’ll not have to — but he might not have any choice.
It is just good business and if he is too stubborn, too arrogant, or just misguided by favorable polling numbers, he should think again. There are several Hillary supporters who will find McCain more centrist than Obama and switch parties. There will be very few, if any, to the right of McCain who will vote for Obama. They are more prone to not vote than support Obama.
Adding Hillary Clinton, in most people’s eyes, will slam dunk the presidential race and if Obama does not make this tough decision, putting success in front of politics and personalities, then I am afraid all his speak of being able to stand up to special interests and take the heat in the kitchen is just that.
You can’t hope to lead the nation if you cannot make a tough call before you even get to the Oval Office. Success in business, as with life in general, is all about making the tough call. Earlier in the month I did so with Serious Money: Tempting fate with 10 financials.
Today I’ll do so again by suggesting that it is time to get back into Home Depot (NYSE: HD) and Lowes Co (NYSE: LOW), two stocks that would be on the most hated list if there was one.
Both companies reported continued losses and most people hate the stocks right now. The prognosis for the housing market is still poor and consumers are cash-strapped and credit-restrained. However, Home Depot remains optimistic. Both companies have clean balance sheets and Home Depot is my favorite of the two because of the absence of debt and the 3.27% yield.
Home Depot shut yesterday at $26.96 and Lowes closed at $24.54. They are about 50% off their respective highs. If you think it’s too early, put them on your watch list and if you are correct you can purchase them cheaper. Or for you options players, perhaps doing puts would grant you to make some side money while you wait.
In my thought, you would be buying quality enterprises cheap for the long haul that’ll have competitive advantages over any upstarts when the economy picks up. Even if it does not do so soon, historically, homeowners and do-it-your-selfers will lend support to the stocks at these levels.
A glimpse of my track record: Serious Money: How safe were BRK, BUD, PG, SO, & UPS?
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I do not own shares of HD or LOW today.
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