With spring in the air and baseball season upon us, I found myself thinking about "fat pitches" that the market is offering investors. In baseball parlance, a fat pitch is when an unfortunate pitcher throws an easy-to-hit pitch right over the middle of a plate, leaving a competent hitter with a fairly easy chance to clobber it out of the park for a home run.

With the recent market turbulence, the market is giving investors some fat pitches to hit. Some great businesses are trading at steep discounts to where they were just a few months ago. One example of such an opportunity is Home Depot (HD 2.85%)

Keep your eye on the ball

Shares of Home Depot are now down about 27% from their 52-week high amid investor concerns about rising mortgage rates cooling down the housing market and the company's lackluster guidance on its most recent earnings call. While the stock is down 27% in the short term, let's zoom out and focus on the long-term value that Home Depot has created for shareholders.

Investors often talk of looking for "multi-baggers" or "10-baggers." Since its IPO in 1981 when the company went public at $12 a share, the company has been a 25-bagger. If an investor bought Home Depot in 1990 when it was trading at $1.75 a share, it has been well over a 100-bagger for that shareholder. In fact, since 1990, Home Depot has given its investors a return of about 17,500% -- and that's not even including the dividends the company has been paying since 1987. No matter the timeframe, Home Depot has a strong history of creating value for its shareholders. 

Father and son shopping for construction materials.

Image source: Getty Images.

Right now, Home Depot looks fairly inexpensive. It isn't screamingly cheap like some cyclical and materials businesses, but a price-to-earnings ratio of below 20 times this year's earnings or just 18 times next year's earnings is reasonable for a high-quality business, and a discount to the 22 times earnings Home Depot has traded at in recent times. Additionally, investors are being paid a dividend that yields just over 2%. Home Depot just raised its annual dividend by 15% to $7.60 per share.

Leave it to the pros 

While there is understandably some concern about slowing demand from consumers, one group that isn't likely to slow down any time soon is professional contractors, who have a huge backlog of jobs to complete. On its last earnings call, Home Depot noted that its Pro segment sales growth outpaced DIY (do it yourself) growth. Home Depot outlined a goal to reach $200 billion in sales ($50 billion above today's revenue), and estimates that Pro customers will account for half of this total.

COO and incoming CEO Richard Decker described how the company is growing its Pro business by relating a story of one large contractor in the Dallas area. The contractor initially used Home Depot for small and unplanned or emergency purchases. Eventually, working with a Pro account representative, the contractor expanded to also using Home Depot for job site delivery purchases and was spending about $100,000 annually. Now, the contractor is in Home Depot's Pro loyalty program, using the mobile app to place orders, and taking large deliveries from its fulfillment centers. This customer is now spending $300,000 annually. 

This customer journey, from stopping in to buy something like an outlet cover that was missing at a job, to growing into a $300,000 customer who made Home Depot an integral part of their business, is what makes the evolution of the company's Pro segment exciting over the long term. 

Is Home Depot a buy? 

Home Depot is navigating through a difficult period due to the uncertain housing market and inflation. But the business has proven that it is a winner over the long term with decades of value creation for shareholders. Given this strong history of performance, its undemanding valuation after the sell-off, its plan to grow sales by $50 billion, and the exciting evolution of the Pro segment, Home Depot looks like it will continue to be a home run over the long term. The market periodically serves up chances to buy great businesses at a discount, and patient investors can be rewarded for swinging at them.