For his S&P 500 Best of Breed portfolio, Covestor model manager Conrad Leifur attempts to outperform the S&P 500 by identifying those component stocks that have the greatest potential to outperform their respective sectors. Current top positions include EMC Corp (EMC), Chevron Corp (CVX) and The Dow Chemical Co (DOW).
On March 21, Leifur added a position in Lowe’s Companies (LOW). In February, LOW exceeded expectations when the company released its 4Q2010 results:
Lowe’s Companies, Inc. recently posted better-than-expected fourth-quarter 2010 results. The quarterly earnings of 21 cents a share beat the Zacks Consensus Estimate of 18 cents and soared 50% from 14 cents earned in the prior-year quarter. The quarterly earnings also exceeded the company’s guidance range of 16 cents to 19 cents a share.
The Zacks Consensus Estimate rose by a penny prior to the earnings release with 5 out of 26 analysts covering the stock revising their estimates upwards and none lowering their projections in the last 30 days.
Zacks Equity Research recently had this to say about LOW:
Being the world’s second largest home improvement retailer, Lowe’s Companies Inc. boasts a proven strategy of investing in stores to enhance customer-shopping experience by improving point-of-sale and directional signage, and adding more choices in product selection. The company’s sustained focus on Everyday Low Prices, New Lower Price, Go Local and Specialty Sales initiatives have helped it to boost its market share.
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In the coming years, Lowe’s plans to concentrate more on private label brands. We believe that greater focus on private label products should facilitate margin improvement.
The company is also actively managing its capital. Lowe’s is rationalizing its capital expenditures, including store-remerchandising efforts, to improve its return on investment. As a result, the company expects to generate substantial future cash flows. The company’s strong liquidity will position it to drive future growth.
Sources:
“Lowe’s Tops Estimates” Zacks Equity Research, 2/23/11. https://finance.yahoo.com/news/Lowes-Tops-zacks-2724047600.html
“Risk-Reward Balances Lowe’s” Zacks Equity Research, 3/15/11. https://finance.yahoo.com/news/RiskReward-Balances-zacks-2925635556.html
