Lowe's Companies, Inc. (LOW)

weiwentg (90.37) Submitted: 6/08/07 3:32 PM : Start Price: $31.42 LOW Score: -0.20

In my risk-seeking days (ie, pre-subprime blowup) I picked a bunch of homebuilders, and it looks like I lost. Lowe's is much better positioned for when the housing market rebounds than any of the builders. It has been able to gain market share on Home Depot and to maintain store productivity despite the adverse conditions in the industry. Its customer service is topnotch (whereas HD's has gone down the tubes - kind of like HP vs Dell). Although 70% of Lowe's stores are within 10 miles of a Home Depot, I think this will, for the foreseeable future, enable Lowe's to weather the competition.

Although it's smaller than HD, Lowe's has sufficient scale to give it pricing advantages and to weather downturns. Its returns on invested capital have been consistent.

And the number of households in the US will increase. That secular trend will continue to drive growth.

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