Glenn Curtis

Assuming you’re a handy guy or gal, when you need to re-roof your house, build a tree house in your backyard, put up a new mailbox, paint your living room, or install a bathroom faucet, where will you get your supplies?

Sure, there’s mom-and-pop hardware stores and supply houses, but if you’re like many Americans, Home Depot (HD) is probably somewhere near the top of your list. The fact that the company is a destination spot -- a one-stop shop for the handy (and those that only think they’re handy, like myself) -- is a major reason why the company can still have a bright future.

Here are some other things worth a mention:

1. Home Depot is trading tantalizingly close to a new 52-week high. I’m a value guy at heart and I don’t like to chase stocks. At the same time, companies trading near their highs or that make new highs (I sense it’s got a good shot) get a lot of attention, so this is something I’m keeping in the back of my head.

2. Many people seem much more upbeat about their financial future than they were six months to a year back, so I think they’ll be more likely to drop coin on seasonal items this winter (ie, snowblowers, shovels, and decorations).

3. People are still afraid to spend big money on higher-end items, but when it comes to decorating or improving their personal abodes in some way, they seem to be a lot more willing to pull out their wallets. To many, it’s money well spent, improving what’s likely among their most treasured, pride-producing, and valuable assets.

4. The third-quarter announcement is coming right up. The company is expected to earn $0.36 and I think it will beat by at least $0.02. The fact that its whooped estimates the last four quarters gives me some confidence it could do it again.

5. I think a lot of people would love to nail down the more than 3% forward yield.

6. It trades at a little more than 18.1 times this year’s estimate, which doesn’t sound too terrific. But because there could be some upside to the $1.67 estimate that’s currently out there for next year, I’m a bit excited.

7. I can’t help but think it’s a "pick-em" when it comes to the Lowe’s (LOW)/Home Depot rivalry that’s been brewing forever. My macro outlook for this space can apply to the folks in the blue aprons, too.

Hey, have a great day!

©2008 Minyanville Publishing and Multimedia, LLC. All Rights Reserved.

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