Home Depot (HD) Insiders buying back in Spades
Posted June 24th, 2008 by Frank Lara Jr
Its no secret The Home Depot, Inc. (NYSE:HD) and Lowe's (NYSE:LOW) stock has taken a huge hit in recent months. But HD officers are laying their money on the line, buying up shares with the utmost confidence in their company. Since May Insider buying of HD shares totals $107.4 million. So should you be buying with them?
This time last year Home Depot shares were worth $39, today they are just above $25. That comes to a -35% return in the last 52 weeks.
Here's how the Buying stacks up, thanks to Finviz.com's tracking (page down):
| Insider Trading | Relationship | Date | Transaction | Cost | #Shares | Value ($) | #Shares Total | SEC Form 4 |
| BOUSBIB ARI | Director | 19-Jun | Buy | 26.64 | 10,000 | 266,400 | 10,000 | 6/23/2008 17:41 |
| BATCHELDER DAVID H | Director | 13-Jun | Buy | 27.23 | 247,301 | 6,734,006 | 36,651,483 | 6/17/2008 17:57 |
| BATCHELDER DAVID H | Director | 6-Jun | Buy | 27.34 | 1,299,900 | 35,539,266 | 39,173,995 | 6/10/2008 17:47 |
| Cornell Brian C | Director | 4-Jun | Buy | 27.44 | 5,000 | 137,200 | 5,000 | 6/5/2008 17:45 |
| BATCHELDER DAVID H | Director | 3-Jun | Buy | 26.82 | 206,495 | 5,538,196 | 37,874,095 | 6/5/2008 17:44 |
| BATCHELDER DAVID H | Director | 2-Jun | Buy | 27.16 | 711,903 | 19,335,285 | 37,667,600 | 6/2/2008 17:53 |
| BATCHELDER DAVID H | Director | 30-May | Buy | 27.44 | 338,668 | 9,293,050 | 36,955,697 | 6/2/2008 17:53 |
| BATCHELDER DAVID H | Director | 29-May | Buy | 27.32 | 400 | 10,928 | 36,617,029 | 6/2/2008 17:53 |
| BATCHELDER DAVID H | Director | 28-May | Buy | 27.29 | 129,500 | 3,534,055 | 36,616,629 | 5/28/2008 17:56 |
| KATEN KAREN L | Director | 27-May | Buy | 26.83 | 5,000 | 134,150 | 6,500 | 5/27/2008 17:39 |
| BATCHELDER DAVID H | Director | 27-May | Buy | 26.97 | 457,871 | 12,348,781 | 36,487,129 | 5/28/2008 17:56 |
| BATCHELDER DAVID H | Director | 23-May | Buy | 26.56 | 546,100 | 14,504,416 | 36,029,258 | 5/28/2008 17:56 |
| Total | $ 107,375,733.00 | 334,094,415 |
So why would these guys be buying, who cares if the stock is 'cheap', its not performing?
Home Depot sees growth when the market stabilizes.
Last Month Home Depot said that per-share profit could drop as much as 24 percent this year, but projected earnings per share would rise in double-digit percentages annually when the U.S. housing market rebounds.
Crumbling U.S. housing market has compounded troubles as higher food and gasoline prices put more pressure on customers.
Lower housing sales, falling home values and tighter credit have curbed demand for the big-ticket renovations that powered Home Depot's growth during the housing boom.
"We see more negatives than positives for the remainder of this year," Home Depot Chairman and Chief Executive Frank Blake said.
Home Depot said it was more comfortable with the low end of its previous forecast calling for a 19 percent to 24 percent decline in per-share earnings for this year.
Once markets stabilize, Home Depot expects yearly per-share profit to rise in the double digits on a percentage basis, fueled by changes it is making to improve customer service and lower operating costs at its stores. It added that sales should rise 3 percent to 5 percent annually when markets recover.
Fellow Masters, if Wall Street still operates and is ahead of the curve by six months, very soon HD could be getting the ol'...
The 1-2-Shabadoo is also granted due to Home Depot's Dividend. Don't continue to kick HD shares to the curb, the officers aren't, and neither should you.
Dividend History
| Declared | Ex-Date | Record | Payable | Amount per Share | Type |
|---|---|---|---|---|---|
| 05/22/08 | 06/03/08 | 06/05/08 | 06/19/08 | $0.225 | U.S. Currency |
| 02/28/08 | 03/11/08 | 03/13/08 | 03/27/08 | $0.225 | U.S. Currency |
| Total Dividends Paid in 2008: | $ 0.450 | ||||
| 11/15/07 | 11/27/07 | 11/29/07 | 12/13/07 | $0.225 | U.S. Currency |
| 08/16/07 | 08/28/07 | 08/30/07 | 09/13/07 | $0.225 | U.S. Currency |
| 05/23/07 | 06/05/07 | 06/07/07 | 06/21/07 | $0.225 | U.S. Currency |
| 02/22/07 | 03/06/07 | 03/08/07 | 03/22/07 | $0.225 | U.S. Currency |
| Total Dividends Paid in 2007: | $ 0.900 | ||||
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Why are Insiders Buying Home Depot?
Look at your list - the vast majority of entries, and the shares purchased, are by David Batchelder. This represents one shareholder and his company, Relational Investors.
He's buying to increase his control of the company - and the Board. He used his clout and money to get a seat on the Board, and he'll continue to push the company to make changes.
You can bet that the company would have continue along under Nardelli but for Batchelder's involvement - ala Carl Icahn - in early 2007.
Frank Blake should be quaking in his shoes, because this guy is going to dictate exactly how the company will reorganize and change tactics.
Of course, when your company strategy can be enunciated as "Retail 101, do-over" ... it doesn't much matter what tactics you take. You're already so far in the hole that no amount of store closings, delays, and layoffs will really have impact fast enough to suit this kind of investor.