Home Depot Getting a Lift

Housing prices, improving economy driving sales at Home Depot.
3:57 | 11/18/14

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Transcript for Home Depot Getting a Lift
It's. I'm Michelle Fran and in new York and the financial markets close on Wall Street for Tuesday November 18 this a story stock. Largest US home improvement retailer surprising Wall Street today. With strong sales figures and more customer traffic in stores. And improving job market and rising home builder confidence in the US. Leading to some more renovations. And new housing starts giving Home Depot a much needed boost. To give us a bit more on what's going on with Home Depot today I'm joined by Joseph bombing managing directors or capital. Hi there Torre Michelle I'm well for all intents and purposes though Home Depot had a great quarter what's the story behind all this growth I think. Growth is just the general. Recovery in the economy and even of the housing market has been slow it's just generally. Were been a good recovery they just reported their second straight quarter of over 20% year over year earnings growth. Which is amazing for company that's doing over eighty billion in revenues. What what struck me most important in the numbers was the same store sales growth so. They did five point 2% exceeding analysts' expectations and then the US specifically was five point 8% same store sales growth in. For any retailer that does even under a billion in revenues that's a huge number for companies doing over eighty billion. That's just do what really strikes me as a strong numbers are same store sales growth. All right sounds like great numbers but despite those numbers the stocks trading lower today. Yet just in general I think the general adage of buy the rumor sell the news let's keep in mind this is a 130 billion. Market cap company that was just eighty dollars in in August. And it's close 200 now so I just think it's just normal profit taking. On the number in anticipated a ready ran up so much. To some normal profit taking. Are at Home Depot is an out of the woods yet it's also added data breach issue like many other companies with Rangel costs on the horizon. As management done a good job containing vaccines the problem. Yep I mean they mentioned in their report that. Excuse me that they can't give an estimate about how much it cost so forth and tasted some around thirty million and expenses but. Again I think with all these big retailers whether its target people forget about it and they've done a really good job. Craig near and his crew have done a good job of containing its and it doesn't seem to be affecting. The stock. Also far let's talk about home prices a little bit rise in in job numbers improving. We'll Home Depot also ride this wave has those improved. Yes I think so the national association of homebuilders there are number this morning for. Builder sentiment is a second highest we've seen since November of 05. And I think that if you look back at that period of course we all know it didn't and well but we still had a good solid 22 and a half years of growth. In the housing sector in the home builders and just the overall retailers to do with housing so I think this could be. You know still in the stages with some growth ahead of us. All right so are you an investor or buyer of Home Depot here or do investors stay away from stocks. That are tied to the housing market no I think I don't. On the stock personally but I do like the stock for investors that don't want the risk for say with just one stock ax HB is a great ETF which covers Lennar Pulte the Williams-Sonoma so not just tell home depots in the air but. Other retailers as well as the home builders that gives you an exposure to the broad sector which I still think you could have going forward over the next two years as we continue to recover. All right Joseph funny forms or capitol thanks for joining us thank you Michelle present. And even watching stories stocks David abcnews.com. For your latest headlines I'm Michelle Franzen in New York.

This transcript has been automatically generated and may not be 100% accurate.

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