Is Home Depot stock a good buy now that shares dipped after the retailer reported earnings Tuesday? Our expert weighed in on FOX Business this afternoon...
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Stock market today, Sept. 10, 2014: Stock market futures were down this morning after markets took a nosedive in the final hour of trading yesterday (Tuesday). The slide followed a broad selloff of tech giant Apple Inc. (Nasdaq: AAPL) and investors heightened cautions over a possible interest rate increase by the Federal Reserve sooner rather than later.
Stock Market Close, Aug. 19, 2014: U.S. stocks roared again Tuesday, buoyed by strong earnings reports and a slew of positive economic data. The surge was led today by The Home Depot Inc. (NYSE: HD), which saw shares rise nearly 6% after the company beat Wall Street estimates for its second quarter.
Home Depot Inc. (NYSE: HD) stock was up 6.1% this morning (Tuesday) from yesterday's close, and touched a 52-week high of $88.72 after the company's second-quarter profits and earnings per share (EPS) topped analysts' estimates.
HD announced EPS of $1.52 on revenue of $23.81 billion. That beat consensus estimates of $1.45 per share on revenue of $23.61 billion.
HD stock may be trading at 52-week highs, but it hasn't reached its peak.
Similarly, homebuilders Beazer Homes USA Inc. (NYSE: BZH) and D. R. Horton Inc. (NYSE: DHI) reported fourth-quarter earnings Monday, which, according to each company's management, reflected a continued U.S. housing market recovery.
Despite improved earnings for fiscal 2012 and a positive outlook for fiscal 2013, shares of Beazer and D.R. Horton were off sharply in afternoon trading on Monday, with BZH down about 17% and DHI 6%. They recovered slightly by Tuesday afternoon.
Home Depot, on the other hand, has rallied sharply on Tuesday, hitting a new 12-year high and closing in on its all-time high of $70, set back in April 2000.
What accounts for the remarkable divergence between the homebuilders and Home Depot?
The answer comes down to comments made by Donald J. Tomnitz, Vice-Chairman, Chief Executive Officer, President and Member of the Executive Committee for D.R. Horton.