HD has a forward PE approaching 16, so its certainly not in the cheap/under-valued category. A real problem I have with HD is that its net profit margin is a mere 5.5%. This reminds me of AMZN, which has very similar problems. A slight deterioration in the economy, a touch higher input/operating costs, and their profitability would get wrecked. A further problem is the 11bn debt, vs 2bn cash. I am no fan of corporate giants with that kind of debt/cash ratio Certainly, HD can manage it at present, but...debt service costs will surely rise in the years ahead.
Key Stats, see: http://finance.yahoo.com/q/ks?s=HD+Key+Statistics
HD, daily
This past Friday HD had a pretty strong close -despite the weaker main market. From a cycle perspective, HD looks ready for a new up move - and Fridays action would support that. First target would be 51.50, maybe 53/55 in the latter half of April.
In terms of the general market, HD will be useful to watch, its relentless strength has been a good example of the underlying nature of the current up cycle. Only a break below 47/46 in the near term would be cause to get the bulls concerned about the bigger picture.
