For Immediate Release

Chicago, IL – February 24, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Home Depot (HD), Fannie Mae (FNM), Freddie Mac (FRE), MGIC (MTG) and Bank of America (BAC).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Tuesday’s Analyst Blog:

Home Depot Misses, Ups Dividend

The Home Depot (HD) reported fourth quarter 2009 results with earnings of 24 cents per share. However, earnings were below the Zacks Consensus Estimate of 36 cents, though they were up 26.3% year-over-year.

Total sales for the quarter were almost flat year-over-year, declining marginally by 0.3% to $14.6 billion. Total same-store sales grew 1.2%, while comparable same-store sales for U.S. stores declined 1.1%. Sales were primarily driven by gains in kitchen and bath, paint, flooring and plumbing and international business, which were offset by weak market fundamentals.

Gross margin for the quarter expanded 45 basis points (bps) to 34.4% versus 34.0% in the prior-year quarter. The operating margin for the quarter expanded 317 bps to 5.0% from 1.8% in the year-ago period.

The company had cash and short-term investments of $1.4 million and a debt-to-capitalization ratio of 31%.

Concurrent with the earnings release, the Board of Directors declared a 5% increase in the quarterly dividend to 23.6 cents per share. Since 2006, this is the first time the Board has increased the dividend. The dividend is payable on March 25, 2010 to shareholders on record as of March 11, 2010.

Housing Prices Show Small Rise

For the vast majority of Americans, the equity in their house is (or was) the main source of wealth for people. Yes, a large percentage of people have some money in the stock market, either directly or indirectly (i.e. mutual funds), but for most, the portfolios are relatively small.

The overall amount of wealth in housing is roughly on the same scale as that of equities; however, I don’t think there is anyone who has even $100 million in personal housing wealth. There are many people (most of the Forbes 400 list) who own several billion of equity wealth.

Also, if the value of a house falls below the amount of the mortgage (goes underwater) it makes a lot of economic sense to simply stop paying the mortgage and eventually walk away from the house. Not everyone will do so and it is probably not worth doing if the amount you are underwater is just a few thousand. If it is substantial, however, then it really does not make a lot of sense to continue paying your mortgage.

That means more losses up and down the mortgage complex, ranging from the GSEs like Fannie Mae (FNM) and Freddie Mac (FRE) to the mortgage insurers like MGIC (MTG) to the big banks that issued the mortgages and continue to service them like Bank of America (BAC).

There is no clear-cut pattern between the cities that held up well in the beginning and how they performed in 2009. Some cities like San Diego and San Francisco, which were among the hardest hit in 2007, have actually started to recover, while some that held up well in 2007 like Portland and Seattle had big price declines in 2009. Other early losers like Las Vegas and Phoenix, are still basket-cases. Dallas, on the other hand, held up well in 2007, and already began rebounding in 2009.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks “Profit from the Pros” e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it’s your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

 

 

Zacks Investment Research