Top Stock to Buy #1 — Home Depot (HD)
Home Depot (NYSE:HD) rose from under $28 to over $42 since August largely due to excellent Q2 earnings of 86 cents versus an 83-cent consensus and meeting its Q3 consensus estimate of 60 cents. Higher gross profit margins and better expense leverage have contributed to the quarterly success. Therefore, analysts raised their full-year 2011 earnings estimate to $2.36 and to $2.60 in 2012. And Credit Suisse analysts consider HD to be undervalued “by a significant margin.”
The breakout from $38 is a major change of direction for the stock. The initial objective is $46, but longer term the stock will likely go much higher.