The market once again chose to put its blinders on yesterday to the chaos unfolding in Europe. Since Greece hasn't left the eurozone yet and sovereign nations were all still standing, it was risk-off time and the Dow was off to the races, jumping 135 points, or 1.1%. But some companies turned tail and still fell hard, so first let's see whether they had good reason to drop. Sometimes, panic-fueled declines can make excellent buying opportunities.
Green shoots again?
The National Association of Realtors says existing-home sales rose 3.4% in April and 10% higher than a year ago while available listed inventory is down almost 21% from last year. And the huge "shadow inventory" of foreclosed homes sitting in the wings, waiting to pummel prices has yet to break upon market. The number of foreclosures actually fell to a five-year low as banks sought other remedies to foreclosure. Everyone's whistling past the graveyard hoping things improve enough to get past the next leg down.
The better conditions are evident in the quarterly results of do-it-yourself specialist Lowe's
While the market sent Lowe's lower, it shouldn't have been surprised, really, considering Home Depot
CAPS member RScottK26 admits the remainder of the year is uncertain for Lowe's but the longer-term prospects remain encouraging.
Will see growth as housing recovers, but also as investors and landlords improve apartments and rental homes. Almost all foreclosures need work done after purchasing. Also, possible Canadian expansion interesting. I don't know about the next 6 to 12 months, but 5 years out I have to think this stock is way up.
I'd have to agree and am marking the home-repair leader to outperform on CAPS, but add Lowe's to your Watchlist and then tell us on the Lowe's CAPS page or in the comments section below if you'd like to build a future with the stock.
Friends without benefits
It's hard to see why anyone thought the Facebook
The problem is Facebook might not be able to live up to expectations. It's coming to light now that during the pre-IPO roadshow, even its lead underwriter, Morgan Stanley
Indeed, highly rated CAPS All-Star weiwentg says there is a value to the company and that investors will find its stock attractive again, though for him it would have to drop by at least another third before he'd consider buying.
My take is that ideally, owners of private companies conducting IPOs are selling to maximize their own revenue. After all, that's what I'd do. And they succeeded. And if the share price is falling, then too bad for the suckers who bought. My other take is that I'd buy Facebook around $20. Not a large position, but I'd buy.
With Facebook under pressure, though, it's going to be tough selling Zynga
Ready for a resurrection
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Fool contributor Rich Duprey holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of JPMorgan Chase. Motley Fool newsletter serviceshave recommended buying shares of Goldman Sachs and Home Depot and writing covered calls on Lowe's Companies. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.