Buying Home Depot shares could be a win right now, given recent reports suggesting professional contractors are faring better than expected, Jim Cramer said Tuesday.
In recent conference calls from Stanley Black & Decker and paint company PPG, the CEOs said professional contractors currently have surprisingly strong backlogs, despite a cooldown on the consumer front.
related investing news
Cramer used the information as a prime example of how to pick high-quality stocks: Anyone eyeing Home Depot and Lowe’s right now would be wise to go with the former, since Lowe’s is more consumer-oriented, he said.
“If you want to bet on contractors who do home refurbishment and home construction, you’ve got to be betting on Home Depot,” Cramer said. Home Depot reports quarterly results on May 16, and how the market moves between now and then could provide an opportunity.
“Between then and now we’re going to get some negative story about the debt ceiling or some bear raid on a regional bank that could drag the whole market down,” Cramer said. “Based on my work, I’m tempted to wait for that pullback and use it to buy the stock of Home Depot for a trade.”
All the while, Cramer said he doesn’t see Home Depot as a guarantee but thinks it’s still worth a shot if you can get the stock at a lower level.
“Maybe the whole exercise produces nothing, like fishing without a catch,” Cramer said.
