Lowe's Companies, Inc. (LOW)

TheParadox (96.45) Submitted: 2/20/08 2:45 PM : Start Price: $23.14 LOW Score: 12.01

The Company has had a great balance sheet and income statement. They reward their shareholders with buy back almost religiously.

They have direct competition almost solely with home depot (HD). Because of this monopolistic competition, some differences must be establish for this company to gain market share. I believe most consumers (Or, at least, I do!) have a fond sense for the customer service they provide and this is what makes LOWE'S stand out to its market. People that foreclose on there homes tend to gut them out and salvage what they can for money. Although in the next few months (maybe up to a year), consumers aren't going to be fixing up a home they don't own, however, these homes probably wont disappear from the market like lost socks in the dryer. In the short run, the consumer market for them could be slow.

Its price is "Efficient" fitting its current situation, however, its long term outlook to me appears great.

At least looking at the past 5 years (From MSN website), there EPS went from .93 to 1.99, an annual compounding rate of 16.4% per year. Its stock price beat the market until may last year.

Looking at the past 10 years from .26 to 1.99, an annual compounding rate of return of 22.5% per year. Clearly beating the market. A 250% return from Lowe's versus 50% return from the S&P500.

A few things are clear: its price is cheap and at a discount since may, it has great management, A market with low competition, and its balance sheet & income sheet usually looks sound. What a great and safe way to make a ton of money.

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