Making an Indirect Bet on the Housing Rebound

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

With the market bouncing off of its February lows, the Alpha Algorithm has generated yet another seven-strategy stock, much like last week. This is unusual and suggests a high level of interest by a wide range of investment strategies.

Atlanta-based Home Depot, Inc. (HD) operates as a home improvement retailer. Home Depot stores sell various building materials, home improvement products and lawn and garden products. They also provide installation, home maintenance, and professional service programs to do-it-yourself, do-it-for-me and professional contractors.

hd copy
Home Depot (HD) vs. S&P 500 over one year

 

Seven Top Investment Strategies Betting on Home Depot (HD)

1.  High Quality Stocks

Buy U.S. stock that exhibits positive fundamentals, including high return on equity, stable year-over-year earnings growth and low financial leverage.

2.  Insider Buying

Identify when corporate officers, directors and shareholders who own more than 5% of each company’s stock are accumulating shares.

3.  Value Line Model

The stock is among the top 100 stocks, from a universe of 1,700 stocks, to which Value Line gives a #1 ranking in its Timeliness Ranking System.

4.  Shareholder Yield

Company: (a) pays cash dividends, (b) engages in net share repurchases, and (c) pays down debt on its balance sheets.

5.  Fundamental Strength

Target top U.S. stock based on fundamentals measured by book value, cash flow and sales dividends.

6.  Large-Cap Growth

The stock is among the top 50 large-capitalization U.S. growth stocks generated through a rigorous 10-factor fundamental screening process.

7.  Hedge Fund Alpha

Based on publicly available disclosures, successful hedge fund managers are investing in the stock

Exclusive  Fed Helps Push Stock Markets Higher

Recommendation

Buy Home Depot Inc. (HD) at market today.

Place your stop at $110.

Options

With the stock currently technically overbought, I am holding off on recommending options on the stock today.

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