Home Depot Rises on Earnings Optimism

Chevron also rises over speculation regarding its midstream business, while Boeing falls.

Feb 25, 2014 at 2:30PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Stocks are taking a breather after yesterday's big run-up, with the Dow Jones Industrial Average (DJINDICES:^DJI) just below breakeven as of 2:30 p.m. EST. While the index's blue-chip stocks are split pretty evenly between risers and losers on a day of relative calm for investors, Home Depot (NYSE:HD) is lighting up the markets with a huge rise. Boeing (NYSE:BA), though, has sunk 2.1% to fall to the bottom of the Dow. Let's catch up on what you need to know.

Home Depot hits the right marks
Earnings season is mostly finished, but Home Depot's late report is delighting investors and bringing in a 3% gain on the market. The home improvement retailer announced today that net earnings fell 1% for its most recent quarter and total sales dipped 3%, consequences of the winter's unusually bad weather. The housing market's rise has sustained Home Depot's climb over the recent past, and while the company's performance dropped off a bit in this most recent quarter, it still managed to beat analyst estimates.

Can the retailer keep up its stock's huge gains after rising more than 65% over the past two years? Projections certainly look rosy: Home Depot expects same-store sales growth of 4.6% for the coming fiscal year, ahead of the 4.4% mark it notched in the fourth quarter. U.S. same-store sales growth in particular has been on a tear lately, picking up 4.9% for the quarter; however, some housing industry observers believe that home price increases and the likelihood of rising interest rates could hamper the sector's growth this year. Still, even though home prices gained more than 13% year over year in December, prices still are far below their pre-recession peaks. With the economy still in rebound mode, there's plenty of room for optimism for Home Depot investors.

Meanwhile, 2013 top Dow stock Boeing has struggled today. Shares of the aerospace giant have tumbled after reports emerged that Boeing is having trouble finding a buyer for 11 787 Dreamliner aircraft the company built early on that had to be retrofitted to meet safety standards, according to a report from Bloomberg Businessweek. The aircraft are valued at up to $1.1 billion; while that may seem like a lot for most companies, it's only a drop in the bucket for Boeing. The airplane manufacturer's total commercial backlog stands at nearly $373 billion as of its most recent fiscal year's end and has been growing rapidly lately. Don't stress Boeing's latest hiccup too much, shareholders.

Finally, Chevron's (NYSE:CVX) stock has gained about 0.8% today amid reports that the company is potentially interested in finding a buyer for its midstream business. Chevron has launched a strategic review of the unit, according to sources who spoke to Bloomberg, although the company hasn't committed to a sale or any other permanent option for the business just yet. Analysts estimate the midstream division could be worth up to $5 billion, a price that would be a big injection of cash for Chevron. Still, things are only in the early stages as far as Chevron and its midstream business go: Don't expect a decision on this unit for quite some time.

Can this amazing stock outperform the Dow's best?
Dow stocks such as Boeing and Home Depot have performed very well as of late. There's a huge difference between a good stock and a stock that can make you rich, however. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Chevron and Home Depot. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers