Having declined over 10% Hd now in correction territory while Byd is in bear territory yet American stock markets have been strong
Puzzled.
Please comment
HD has increased 20% from its market low of 2022 and 2023, but it fell after its recent earnings results where management noted a delayed start to spring and continued softness in large discretionary projects. Management guided for a sales decline of 1% in FY2024 and gross margins of 33.9%. Overall, it's a strong brand name and company that has a 4.6% shareholder yield (2.5% dividend yield and a 2.3% buyback yield, partially offset by the issuance of debt 0.2%). We continue to like the name and feel that its long-term upwards trend is still intact.
BYD has been an incredible long-term compounded, but it has recently come into some operational challenges such as reduced labour margins and higher upfront expenses from its greenfield and brownfield locations. Management noted its greenfield and brownfield locations should add higher margins over the long-term, but in the near-term they are acting as headwinds. We continue to like BYD as a long-term hold, and would be very comfortable with a position here.