Home Depot has been added to the Fiducia Fund.

More can be found here: https://www.fiduciainvesting.com/post/the-home-depot-part-1

Some taste:

What are the catalysts for The Home Depot, a $290b+ Market Cap company? Comps may be difficult in 2022, I mean, Home Depot did just post a 23.2% increase in revenue YoY for a large-cap company. I think an opportunity in Home Depot will be this sort of scenario: Travel & Leisure will pick up in 2021+, maybe making home improvements less attractive, therefore hurting Home Depot in the short-term. This may put the stock “out of favor”, but I would love to accumulate shares. Everyone points to low rates as being the biggest catalyst, I think that is just one. One thing I like about Home Depot is where are the threats? Amazon? I think Home Depot & Lowe’s have established themselves as the clear players. In 2018, the company invested 11b to better their technology, store improvements, as well as the supply chain. This is a dominant company, in an ever-evolving market because home building and construction will most likely always be here.

The company is still on their dividend increase and share repurchase program (which they suspended because of covid, but will resume), this is also a catalyst to attractive passive money for income as well as bottom line appreciation. Now we can talk about the HD Supply acquisition, because that is obviously a catalyst as well. The company states that this acquisition positions them to drive sales in a “highly fragmented” MRO space, MRO = Maintenance, Repair, Operations. Honestly, paying $8b for the company does not seem like a bad deal. I am looking forward to the synergistic opportunities HD Supply will. bring in the future. Home Depot plans to finance the acquisition with cash on hand and new debt. Rates are low, why not? Makes sense to me. The acquisition will also be accretive to EPS in Fiscal 2021, and more shareholder value over the long-run. I also want to make note that Home Depot has consistently raised their dividends over the years as well. We will take a further look in the segment below. From what I have personally seen this year, M&A activity has dampened short-term performance in stocks I have seen. For instance, Teladoc and Livongo. Teladoc has traded down since the deal. Yes, comps will be hard for Home Depot to beat in 2021, but that does not worry me.