Lowe's Companies, Inc. (LOW)

Billybob402 (< 20) Submitted: 5/08/08 10:26 AM : Start Price: $24.54 LOW Score: -0.91

As a former HD exec, I now shop at Lowes. They care more about being in stock, customer service, store presentation. Simply put: they are better at what HD invented. HD is pathetic now.

But here is the bigger point. I ran stores in up economies and down. We made money every year. Sales volume was impacted by peoples wallets for sure, but here's the bigger point. Despite all the best efforts of HD and Low, the vast majority of home builders do not use these guys. They work from local lumber yards that have contractor desks that really know what they are doing and deliver on a dime (same day), always have the right product, and even have a sales force in the field to see what their customers really need. They have boom trucks that can put sheet rock loads where they need to go (ever move some "rock" from the driveway to the second floor by hand?).

For all their feeble attempts at capturing the home building biz, these two companies are miserable at it. The HD and LOW business is completely driven by the DYI and small remodeler customer. So guess what's going to happen when we realize that there really isn't a recession (or a short mild thing)? Folks will pick up the pace on their home improvement of course. Everyones favorite pastime.

My thought: buy HD to trade (lot's of people believe the old myth, especially analysts). Buy LOW to own.

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