Home Depot vs Lowe's: Go With Oprah
Read the full article at: http://valueplays.blogspot.com/2007/05/home-depot-vs-lowes-go-with-oprah.html
Submitted by TS on Thu, 2007-05-24 14:05.
(via valueplays.blogspot.com)
With both home Depot and Lowe's reporting numbers in the past two weeks after the dust has settled, what should you do? After all, both have disappointed with earnings falling 29% for Home Depot (HD) and 12% for Lowe's (LOW). Both have lowered expectations for the remainder of 2007 and both stocks have been losers over the past year with investors seeing their investment flat lined. Now, eventually we all know that housing will turn around because nothing stays down forever and let's be honest, folks do need a place to live and there are more of us every year. There is built in demand here. Neither Home Depot or Lowe's will need to convince people they need to buy the products they sell, what they do need to do is convince them to get those products from them, not the other guy.
Enter Oprah. Probably the single most important endorsement a company or person can get today is one from Ms. Winfrey. The mention of a book on her show instantly makes it a best seller. A personal trainer or self help personality featured on the show will find their schedule instantly filled at whatever rate they demand. In short, if Oprah gives you the thumbs up, welcome to instant success. Love her or hate her, her impact is undeniable. You are probably asking yourself what this has to do with Home depot and Lowe's.
Oprah shops at Lowe's. This spring has featured various home improvement episodes like the most recent one in which Oprah did a favor for her neighbors by sprucing up their Chicago balconies. Who did the work and got essentially an entire show long infomercial and thumbs up from Oprah? Lowe's.
The effect of this can be seen in the latest earnings report from Lowe's when they reported that 17 of 19 company segments experienced market share gains during the last quarter and while customers are spending less per trip, more of them (to the tune of 5.9%) are choosing Lowe's when they shop. While this number may seem small, it is staggering when you consider Home Depot experienced a 20% drop in store traffic during the most recent quarter.
Oprah
Are you truly serious - recommending a stock because Oprah said something about shopping there??? She is the one who endorsed books that were plagiarized or not true. Why would you even consider giving her a tiny bit of credibility? She is simply an overweight talking head who appeals to soccer Moms. No financial person should even acknowledge her existence
To be expected as I believe
To be expected as I believe this is by the same author who at one stage was recommending Owens Cornings as by his calculations it was selling at a ridiculously low P/E.... If I remember correctly he initially touted it as emerging from chapter 11 with a p/e of ~2
What this has to do with
What this has to do with Home depot and Lowe's?
Washer Parts
No question about it of
No question about it of Oprah says your name you'll find success no matter what you do and for that I go with Lowes, i do like them better then home depot i walk into home depot and it's just not a pretty place the people really dont know much about what their doing. Lowes is a little better not much but i prefer shopping there. Some Dallas insulation company we hired for some work said the same we asked where they shop since both home depot and lowes are right in the area they said lowes.