Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
**warning this is my first ranking post--accuracy not guaranteed**

here are the HD numbers for the quarter ending 10/31/99, i think that's Q3 99:



                   Home Depot                                         Lowes      <Fill in Name> <Fill in Name>
                 Current Period Year-ago PeriodYear-over-Year    Current Period  Current Period Current Period
                     Oct-99         Oct-98         Growth            Oct-99          <Date>         <Date>
Income Statement    millions
  Sales                   9,877          7,699      28.3%                  3,909
  Cost of Goods S         6,983          5,522      26.5%                  2,820
  Net Income                573            392      46.2%                    168
  Shares Outstand         1,561          1,547      0.9%

Balance Sheet . . .
  Cash & Equivale           976             62     1474.2%                   705
  Current Assets          7,058          4,933      43.1%                  3,877
  Short-term Debt             8             14     -42.9%                    191
  Current Liabili         4,164          2,857      45.7%                  2,391
  Long-term Debt            735          1,566     -53.1%                  1,733
                                                                                1              0              0
Margins & Ratios . . .                                                                                         Competitors' Average
  Gross Margins            29.3%          28.3%      1.0                    27.9%                                   27.9%
  Net Margins               5.8%           5.1%      0.7                     4.3%                                    4.3%
  Cash-to-Debt              1.31           0.04    3247.5%                   0.37                                    0.37
  Net Cash                 233.0        -1518.0      N/A                  -1219.0                                 -1219.0
  Fool Flow Ratio           1.46           1.71    -14.6%                    1.44                                    1.44


                  Continue Here

Ranking Rule Makers

1) Brand          Points (0-1)                                  3) Financial Dire Points (0-3)
Familiarity                    1                                Sales Growth                   3
Openness                       1                                Gross Margins                  3
Optimism                       1                                Net Margins                    3
Legitimacy                     1                                Shares Outstandin              2
Inevitability                  0                                Cash-to-Debt                   2
Solitariness                   1                                Fool Flow Ratio                3
Humor                          1                                Expansion Potenti              3
  Subtotal                     6                                  Subtotal                    19

2) Financial Loca Points (0-2)                                  4) Monopoly Statu Points (0-4)
Mass Market Habit              2                                Gross Margins                  2
Gross Margins                  0                                Net Margins                    2
Net Margins                    0                                Net Cash                       4
Cash-to-Debt                   1                                Fool Flow Ratio                0
Fool Flow Ratio                0                                Convenience                    4
Your Interest                  0                                  Subtotal                    12
  Subtotal                     3
                                                                5) Your  Enjoymen              1

                   Total Score               41  Second Tier

HD has really improved since it's last ranking (36)
see post 4003
http://boards.fool.com/Message.asp?id=1030043001263000&sort=postdate

the major factor seems to be a huge increase in cash
which improves the cash to debt and flow ratio such that HD gains 7 points 
(compared with it's last ranking) 
based on financial direction and monopoly status.  
anyone mind double checking the cash figures for me?
not sure how cash rose so rapidly, perhaps disproportionate net income rise...
also note i did not give HD a point for inevitability while previous rankings have.  


although unlikely to achieve rule maker status based on static figures (financial location) 
because margins will likely remain low, 
HD is achieving near rule maker ranking by it's strong brand, 
financial direction and monopoly status figures.  
btw, i couldn't think of any other competitor's. 
ACE is privately held. i'm not familiar with Lowe's--i'm open to suggestions.  


as this is my first ranking
please let me know if you see any egregious errors
thanks

y
Print the post Back To Top
No. of Recommendations: 0
**warning this is my first ranking post--accuracy not guaranteed**

Anything free comes with no guarantee, right ?! ;^)

Good looking ranker tho I cant swear for the numbers. I do suspect that this is about as high as HD might get too. Why?? Well the flowie could get them 4-6 more points if they get it down under 1.5 but with very little ST debt that means they have to lower current assets which are probably tied up in A/R and Inventories - typical for merchant companies like HD.

The other place they lose big is margins (gross and net). Again they generate lots of cash, as you noted in your report, when things are going well, but, merchant retailer companies rarely, if ever, get the margins up to the top RM standards of 50% and 10-12% (gross and net). Dell is in a similar situation regarding margins.

Overall, I'd say they are a Merchant-King rather than a RM. Certainly seems, from this report, as if they may be starting to get the best of Loews.

cheers,

jgc
Print the post Back To Top