Oversold shares of Home Depot (HD) look interesting.

After crumbling from about $420 to a low of about $345, HD appears to have finally found a bottom and is starting to pivot higher. It’s also pivoting from over-extensions on RSI, MACD and Williams’ %R. From its last traded price of $362.13, we’d like to see HD retest $370 initially.

Helping, Home Depot director Gregory Brenneman paid $1 million on March 14, for 2,884 shares, at an average price of $346.66. 

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Also, in its most recent quarter, the company’s EPS of $3.13 beat estimates by nine cents. Revenue of $39.7 billion, up 14.1% year over year, beat by $630 million. “Sales for the fourth quarter of fiscal 2024 were $39.7 billion, an increase of $4.9 billion, or 14.1% from the fourth quarter of fiscal 2023. Comparable sales for the fourth quarter of fiscal 2024 increased 0.8%, and comparable sales in the U.S. increased 1.3%,” added Seeking Alpha.

The company also raised its quarterly dividend by 2.2% to $2.30 a share, which works out to $9.20 when annualized. 

Unfortunately, the stock did fall on guidance.

Home Depot expects total sales to increase approximately 2.8% in FY24 and EPS to fall about 3%. During a media interview, CFO Richard McPhail warned that he doesn’t see the housing market improving in 2025.

The good news is most of the negativity from that outlook appears to be priced in.

Sincerely,

Ian Cooper