Buying the Stock to Make Money Sounds a Whole Lot Easier than Fixing My House
Lowes at $17.90 appears to be a good buy too me. Following my recent post on CAGR Lowes has returned its shareholders approximately 17% per year since 1988. Beats the panst off the S&P 500 yearly returns. If it just continues this pace then I’m happy I’ll call it a day. However, this is the lowest return on investment point at any time in the last 20 years! Do you feel Lowes is at it’s worse point in 20 years or that the market has overvalue Lowes for 20 years? This seems unlikely to me too.
Lowes has fallen 38% in the last year while the S&P 500 has fallen 42%. It looks to me it has just been dragged down with the market.
CHICAGO (AP) — Shares of home improvement chain Lowe’s Cos. Inc. slid amid broader market declines Friday as an analyst called the company a “best-in-class” business.
Stifel Nicolaus & Co. analyst David Schick said Lowe’s wasn’t “too bullish” on its existing guidance that projects the company will double its 2008 earnings per share of $1.50 by 2013.
The rest of the article can be found at:
http://biz.yahoo.com/ap/081010/lowe_s_analyst_note.html?.v=1
I believe being called best in class is always good, but combined with talking about improving earnings in such a panicked market is also a great thing.
Technical Analysis:
Looking at the chart we see the 50 day moving average has just crossed the 200 day. This would have been a hugely positive sign if the last week hadn’t been so horrific. With the volume so high there is potential to make decent gains however with the RSI being in the over sold territory I wouldn’t go shorting Lowes either. I plan on waiting for the RSI to cross the 50 and the MACD to turn positive. If the 50 day MA crosses the 200 again or stays above then I’ll be purchasing some Lowes myself.
Conclusion:
Lowes is a great buy in my oppinion for the long term future and a good buy in the immediate future. With the credit crunch on and mortgage money tight I believe the general public will increase their household restorations to keep their homes enjoyable to live in or prevent themselves from needing to move as their life changes.
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