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3 Retail Stocks to Check Out Now

These companies stand to gain from increased consumer spending

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Home Depot

Home Depot HDWhile the red-hot housing market is showing signs of slowing down, home improvement retailer Home Depot (HD) continues to hold promise.

Part of that is scale, because its 2,250 locations give it a mainline into consumer spending trends. But it’s also the positioning that allows Home Depot to do well even if the initial push in housing is past. That’s because families in new homes (or rather, families in new existing homes) frequently spend a lot of money over the first few years painting bedrooms or replacing appliances or picking out new light fixtures.

Thus it’s no surprise to see Home Depot stock up 22% in 2013 to outperform the market even as big-name homebuilders like Toll Brothers (TOL) and PulteGroup (PHM) are actually sitting on a loss.

Builders benefited with a massive run up in stock on the initial boom, but Home Depot has seen sales steadily improve and stay firm. That makes it one of the best retail stocks out there — and perhaps the only stable housing play now that the biggest gains for real estate are in the rear-view.

Jeff Reeves is the editor of and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at or follow him on Twitter via @JeffReevesIP. As of this writing, he did not hold a position in any of the stocks named here.

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