Tomahawk, WI 8/22/2013 (BasicsMedia) – Lowe’s Companies, Inc. (NYSE:LOW) operates as one of the top home improvement retailers with stores numbering 1,745 located in the U.S, Canada and Mexico. The main customers who the company serves with its products include commercial business customers, renters and individual homeowners. The real estate industry in the U.S has been performing quiet well of late, after the financial crisis of 2008. This has been good news to LOW and other home improvement companies in the U.S and elsewhere. Is it a must add to an investor’s portfolio?

It is strange that although LOW has seen an increase of around 30% in the company’s stock, investors aren’t rushing to buy. There isn’t as much activity as would have been expected of a company of LOW’s stature and reputation with such a turn of events. A number of hedge funds hold long term interests in this stock. They don’t hold this company is high esteem like they used to do a few years ago. This is quite instrumental and investors ought to observe such behavior and trends when making decision on whether to buy or sell these types of stock.

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Image is from www.insidermonkey.com

If hedge funds and insiders hold stock in any company, investors ought to take a keen interest in how they are trading, or conducting their affairs. LOW stock is held by a number of hedge funds as well as insiders and this is where investor’s focus ought to be directed. This is not something which is unique to LOW only. Similar trend has been noted with other companies in the home improvement sector, such as The Home Depot, Lumber Liquidators Holdings Inc, Builders First Source Inc and Orchard Supply Hardware Stores Corp. Their market cap is quite similar.

Lowe’s Companies Inc holds a very significant place in the U.S economy. It is the second largest company operating in the home improvement sector worldwide. However, in the U.S, it is listed as one of the top ten largest companies. In 2009, it reported sales worth more than $47.2 billion. The only home improvement company which is bigger than Lowe’s Companies Inc in the whole world is The Home Depot. It attracted sales worth around $66.2 billion in 2009, which was higher than what LOW managed in the same period.

LOW Musty Not Be Held Hostage by Interest Rates

Interest rates are among a few factors which hold LOW hostage and prevent it from performing to the best of its abilities. As the housing market experiences a slow down, which has been in place since 2008, the company’s margins, earnings and revenue as well as profits, will be affected. And this is what has actually been happening for quite some time. The subprime mortgage crisis hasn’t helped matters as well. Given that it is not as severe as it was a couple of years ago, there is hope that the situation will change for the better very soon.

LOW Needs to Expand Its Stores

If LOW could operate in a market which allows it to carry out store expansion at the level which it needs to, it would perform wonders. However, it has no choice than to do whatever it can to ensure it doesn’t cede more ground to its competitors. The acts it has put in place must be commended since they are at least making investors hold back from getting out of the LOW stock completely, which is what had been projected by a number of analysts. As long as the housing market recovers in full, and the interest rates favor LOW, it will always be attractive.

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