We contributed to an article in this week’s Barron’s that discusses the prospects for Lowe’s Companies, one of the giants in the home improvement industry and a stock we have been buying for our portfolios. Following are a few highlights:
Obviously the major players like Lowe’s [(LOW)] and bigger rival Home Depot (HD) are in a much better position than small local or regional suppliers…. “We believe Lowe’s will continue to gain share and increase profits primarily at the expense of smaller competitors, who cannot match the company’s purchasing power,” says Jordan Smyth, a managing director at Edgemoor Investment Advisors in Bethesda, Md. His firm, with $380 million in assets, has been buying Lowe’s….
Smyth contends Lowe’s has plenty of room to expand in the fragmented $695 billion retail hardware market where in 2009 it held only a 7% share, lagging behind Home Depot’s 10% share. Edgemoor expects the overall market to grow at 5% a year up to 2013.
Click on this link to view the full article at Barron’s (subscription may be required), or you can watch some video highlights here. We also reviewed Lowe’s in our last quarterly report, which you can access from our website by clicking here.
