I actually think one of the big advantages you have with Lowe's or Home Depot as an investment is that if you are considering one, you have as close to an identical copy of the business to compare and contrast against as you generally are able to get. Home Depot is a bit bigger than Lowe's with about a 30% bigger store count, but you get my basic idea. Back when both Best Buy and Circuit City were in business or Barnes and Noble and Borders were both in business you had similar cases. Look at both stores and see what their revenue growth looks like, what their store growth rates are, what their same store sales are, what their margins are like, what their balance sheet looks like (how much debt/how much cash) both now and in the recent past (say, 5 years back). What are the differences? What's the reason behind the differences? If one company is selling at a lower PE ratio than the other, what's the reason? Is the cheaper company growing at a slower rate, posting lower same store sales, have weaker margins, have a lot more debt? If they both just happen to be good deals there's no problem with buying them both.Mike
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