Categories: Alpha Algorithm HotlinesStock Market News

A Second Bet on the Home Improvement Sector

This week’s Alpha Algorithm recommendation is the primary competitor to another current pick in our portfolio, Home Depot (HD).

Founded in 1946 and based in Mooresville, North Carolina, Lowe’s Companies, Inc. (LOW) is a home improvement retailer, offering products for maintenance, repair, remodeling and home decorating. It operates 1,857 home improvement and hardware stores in the United States, Canada and Mexico.

Lowe’s (LOW) vs. S&P 500 over five years

Five Top Investment Strategies Betting on LOW

Share Buybacks

U.S. stocks that have reduced their shares outstanding by at least 5% in the previous year through share repurchases.

Dividend Aristocrats

Companies that have increased dividends for at least 25 consecutive years.

Float Shrink

Companies that shrink their float while growing free cash flow and not increasing their leverage.

Shareholder Yield

Companies (a) paying cash dividends, (b) engaging in net share repurchases and (c) paying down debt on their balance sheets.

Large Cap Growth

Top 50 large-cap U.S. growth stocks yielded through a rigorous 10 factor fundamental screening process.

Recommendation

Buy Lowe’s Companies, Inc. (LOW) at market today.

Place your stop at $66.00.

Options

Buy the LOW July $75 calls (LOW160715C00075000) that last traded at $3.55 and expire on July 15.

Portfolio Update

As I have indicated, I tend to recommend options only when the stock has pulled back in the midst of an uptrend.

With Apple (AAPL) pulling back 4.38% over the past week, and now technically oversold, I am now recommending that you buy the AAPL July $105 Apple options (AAPL160715C00105000) that last traded at $5.80 and expire on July 15.

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.