We keep hearing about the home equity loan, the remodeling trade and how when you are living at home it is do-it-yourself time. But we don't have the list that we need of the stocks we should buy to profit from the bull market in DYI.
First, I freely acknowledge that this bull market has been going on ever since we realized that the pandemic was going to be nationwide and we got the stay and home work at home orders. Well, we don't have to stay at home, we have been unleashed to do whatever we want. But the central office? We have multiple reports that only about 50% of central offices are even in use.
Second, I struggled tonight if I should write about the auto bull market as verified today by comments from Texas Instruments (TXN) and AutoNation (AN) . But that might be too specific.
But we will process what we will hear tonight from Lithia Motors (LAD) and make some real judgments.
So let's stay with the DYI especially because I think this theme, like last night's bull market revelation, has staying power regardless of who resides in the White House.
To get the best names, Jimmy Chill went to Twitter (TWTR) to see what people are doing and while it may seem anecdotal, taken en masse I think I can match the ideas with the best stocks to play them - my stock in trade - and help us make some money.
So, here we go. First, and foremost, to get the stuff that people use to redo you have to go somewhere and people are going to Home Depot (HD) and Lowe's (LOW) and Costco (COST) , the first two being primary and the second, in the mix.
I know their stocks have moved up. That's rankled me for ages. But there's some good news here. We keep hearing we are in for a 10% collapse in the averages if Biden wins. I don't believe it. However, I do know getting a discount on these three is as impossible as getting merchandise at a discount. You have to be ready to buy these because they are controlled by low rates and Covid-19, not special issues that are divisive and, well, sad.
The number one thing people are doing? Fixing decks. I ought to know, I did, too. I used Azek (AZEK) , running by a friend of mine, Jesse Singh who appeared on the show when the company came public. They are considered to be the gold standard and the stock, at $37 and relatively unknown, is just plain right. I love my deck. Trex (TREX) is in the running, too, but talk to your contractor and see what he says.
Last night, another friend of the show, WD-40 (WDFC) reported a blow-out number. I find that their stuff is essential to pretty much everything decking and fixing. CEO Garry Ridge said it exactly on his conference call: "It seems that the more time people spend isolated in their homes the more time, the more money, they spend, making home improvements. "
Another broad sweeping winner? Tool company Stanley Black & Decker (SWK) which dominates whole aisles at Lowe's, Home Depot and Costco. Hard to believe but that stock is only up 5% for the year.
A lot of people bought appliances and the only one that trades here is Whirlpool (WHR) . Here's another score: the CEO Marc Bitzer is a man of the world who knows what the younger home buyers want: reasonably priced high quality products. That's what Whirlpool stands for. How can this stock be only a 12 times earnings with that resume?
Lots of people painting. Go with Sherwin-Williams (SHW) which has beaten the numbers endlessly or look out for PPG Industries (PPG) which just reported a terrific quarter, the first of what I think will be many.
We got a couple of air conditioner shout outs and that's Carrier (CARR) , but there's a lot of industrial input in this recent spin-off.
New landscaping, that's SiteOne Landscape Supply (SITE) . Kitchen re-do? Fortune Brands Home & Security (FBHS) and Masco (MAS) .
Candidly there are a lot more companies in the space but these are the ones that come to the fore.
Now when you get secular bull markets like this you don't wake up and start buying. You wait for the pullback that everyone is looking for. When that happens and we have a down day, the next day will be a sell-hard day and then you can make your move.
(Costco is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells COST? Learn more now.)
