This week’s Alpha Algorithm recommendation is the primary competitor to another current pick in our portfolio, Home Depot (HD).
Founded in 1946 and based in Mooresville, North Carolina, Lowe’s Companies, Inc. (LOW) is a home improvement retailer, offering products for maintenance, repair, remodeling and home decorating. It operates 1,857 home improvement and hardware stores in the United States, Canada and Mexico.
Lowe’s (LOW) vs. S&P 500 over five years
Five Top Investment Strategies Betting on LOW
- Share Buybacks
U.S. stocks that have reduced their shares outstanding by at least 5% in the previous year through share repurchases.
- Dividend Aristocrats
Companies that have increased dividends for at least 25 consecutive years.
- Float Shrink
Companies that shrink their float while growing free cash flow and not increasing their leverage.
- Shareholder Yield
Companies (a) paying cash dividends, (b) engaging in net share repurchases and (c) paying down debt on their balance sheets.
- Large Cap Growth
Top 50 large-cap U.S. growth stocks yielded through a rigorous 10 factor fundamental screening process.
Recommendation
Buy Lowe’s Companies, Inc. (LOW) at market today.
Place your stop at $66.00.
Options
Buy the LOW July $75 calls (LOW160715C00075000) that last traded at $3.55 and expire on July 15.
Portfolio Update
As I have indicated, I tend to recommend options only when the stock has pulled back in the midst of an uptrend.
With Apple (AAPL) pulling back 4.38% over the past week, and now technically oversold, I am now recommending that you buy the AAPL July $105 Apple options (AAPL160715C00105000) that last traded at $5.80 and expire on July 15.
