Buffett Eyes Home Depot as Portfolio Addition Amid Aging U.S. Homes
Warren Buffett, the renowned investor and CEO of Berkshire Hathaway, has been considering The Home Depot (HD) as a potential addition to his portfolio. Buffett, known for his 'business picker' approach, might appreciate Home Depot's solid operating margin and return on invested capital. Meanwhile, the increasing median age of U.S. homes could drive demand for home improvement products, benefiting Home Depot.
Buffett has a history with Home Depot, previously owning the stock before selling it in 2009. Since then, Home Depot's stock has surged by approximately 1,570%, and its total return, including reinvested dividends, is around 2,370%. Buffett's investment in homebuilders D.R. Horton and Lennar also suggests a positive outlook on the home improvement sector. However, Buffett has been cautious about new investments due to economic uncertainties and a lack of attractive opportunities, holding large cash reserves. He has delegated some investment decisions to Todd Combs and Ted Weschler, but the final call on Home Depot remains with Buffett, who has a proven track record of successful stock selection.
While Buffett has not recently added to his Home Depot stake, his interest in the company and the home improvement sector is evident. If the right opportunity presents itself, Buffett might recommend The Home Depot as a stock for Berkshire Hathaway's portfolio, given its strong financial performance and the potential demand growth driven by the aging U.S. housing stock.
