Home Depot

1
Home Depot

• Dave Bushey
• Ticker HD
• 10/12/04

2
Company Info

• What they do
• Operate a chain of retail building supply/home
  improvement
• warehouses. Strive to offer products at the
  lowest prices with trained
• associates giving absolutely the best customer
  service.
• History
• First Store opened in Atlanta Georgia on June
  22,1979
• First Store carried 25,000 products, today's
  carry 40,000 products
• Today there are over 1,700 stores throughout the
  US, Canada, Mexico
• On average they are opening a store every 48
  hours

3
Facts / Products

• Facts
• Home Depot is the worlds leading employer of
  Olympic and
• And Paralympic athletes and hopefuls
• Home Depot is the fastest growing retailer in
  history the first to
• reach 30 billion, then 40 billion and now 50
  billion in sales.
• Over 22 million people visit a Home Depot store
  each week.
• 300,000 associates
• Over 875 tool rental centers
• NASCAR Sponsor
• Products
• 40,000 different products
• Different Store departments (building material,
  millwork, plumbing, paint, flooring, hardware,
  electrical, lawn garden, etc.)
• Geographical merchandising
• Tool rental center

4
Competitors

• Lowes

5
Recent News

• Shares look undervalued
• Barron's said a price/earnings ratio of 20 times
  earnings, implying a stock price of 50, seems
  reasonable for a company that returns more than
  20 percent on invested capital and has a
  cash-heavy balance sheet.
• Analysts polled by Reuters Estimates on average
  expect Home Depot to post per-share profit of
  2.21 in fiscal 2005, which ends in January, and
  2.53 in fiscal 2006.
• 2nd Ranked retailing store behind Wal-Mart by
  Forbes Magazine

6
Pros Cons

• Pros
• Expansion into Chinese market
• Continued growth
• Low debt levels
• High cash balance
• Cons
• Raise in mortgages rates and interest rates

7
SWOT Analysis

• Strengths
• Growth of the company in only 25 years
• Dedication to customer service
• Weaknesses
• Shares Short
• Opportunities
• Continue to expand, into markets overseas (China)
• Threats
• rates

8
Ratio Comparison
9
Intrinsic Value

• Intrinsic Value 42.92
• On 10/12/04 at 2pm39.71
• Buy 40 shares (/-)
• Discussion