When trading begins tomorrow there will be a rush to make money from Hurricane Sandy with the automatic notion that Home Depot (HD) and Lowe’s (LOW) are the stocks to own. 

It would stand to reason the storm has created huge demand for the things stocked at these stores, but common sense doesn’t always work in the stock market.

After Hurricane Katrina in late 2005, investors flocked to these names. In both cases the share price was near what would be the all-time high.  There are other names I like as longer term plays on Sandy but between these two I would go with HD. Ironically after recently beating the street HD caught a downgrade while LOW, after missing the street, caught two upgrades on targets.  I think there are better long-term investments including Generac (GNRC), PGT Inc. (PGTI), Lumber Liquidators (LL) and Clean Harbors (CLH) but of the two big box home improvement stores I like HD best.

Better execution, larger stores and footprint in Sandy’s path.

Home Improvement Retailer -- Peer Analysis

LOW

HD

Katrina Aftermath (Sept 2005)

$32.00

$33.00 high

$15.85 low (Feb 2009)

$38.00

$40.00 high

$20.90 low (Feb 2009)

 

 

Most Recent Quarter

 

Missed $0.05

 

Beat $0.04

 

Next FY Consensus Trends (3m)

 

$2.02 from $2.23

 

$3.38 from $3.32

 

PE

 

15.5

 

17.8

 

PB

 

2.5

 

5.0

 

Brokerage Ratings News

 

Upped

Nomura target $38 from $32 (buy)

BAC target $36 (buy)

 

Downgraded

Oppenheimer (perform)

 

Key Breakout Point

 

$33.00

 

$63.00

 

Key Support Point

 

$30.00

 

$58.00

 

Charles Payne is the host of Making Money with Charles Payne (weekdays 6-7 PM/ET). Click here to see more from Charles Payne.