HomeMarket NewsUnearthing Hidden Gems: Top 3 Home Improvement Stocks Poised for Growth in...

Unearthing Hidden Gems: Top 3 Home Improvement Stocks Poised for Growth in March 2024

Actionable Trade Ideas

always free

These undiscovered treasures in the world of home improvement stocks offer a unique opportunity for investors to grab a slice of the market’s growth pie at an incredible value.

undervalued home improvement stocks - The 3 Most Undervalued Home Improvement Stocks to Buy in March 2024

Source: Don Pablo / Shutterstock.com

Steeped in history and brimming with untapped potential, the housing market behemoth continues to surprise the financial world with its resilience and adaptability. The pandemic acted as a catalyst for the rapid surge in home improvement projects, catapulting numerous industry giants to unprecedented heights. However, amid the tempest of change and challenge, three home improvement stocks stand as hidden jewels, waiting to be unearthed by savvy investors eager for growth.

Embark on a journey through the growth trajectories, year-over-year performance, and surprisingly low valuations that underpin these three undervalued home improvement stocks, painting a compelling portrait of opportunity in the ever-evolving landscape of the market.

Beyond Ordinary: Unveiling the Potential of Lowes (LOW)

the front of a Lowe's store

Source: Helen89 / Shutterstock.com

Lowes (NYSE:LOW), the stalwart of home improvement retail, has carved an impressive path of growth over the past five years, boasting a robust 130% surge that outshines the S&P 500 by a considerable margin. With a sprawling network of over 1700 stores nationwide and a diverse product range, Lowes stands as a beacon of reliability and accessibility in the realm of home improvement.

Despite its illustrious track record, Lowes finds itself in the shadows of its peak during the pandemic era, grappling with prevailing economic trends such as escalating interest rates and inflation-induced hesitancy among homeowners. However, the company has embarked on a strategic journey to counteract the ebb in home improvement expenditure and bolster its financial performance by courting professional clientele through enticing loyalty programs and exclusive discounts.

Though Lowes trails behind its competitor Home Depot (NYSE:HD) in certain aspects, its trailing P/E ratio of 18.79 presents a tantalizing opportunity for investors, far surpassing Home Depot’s 24.8. Patient investors poised at the cusp of opportunity can leverage this discounted valuation to partake in the prosperity that Lowes so often pledges.

Arhaus (ARHS): A Diamond in the Rough

An image of the Arhaus, Inc. (ARHS) logo

Basking in the limelight of obscurity, Arhaus (NASDAQ:ARHS) stands as a massive home furnishing retailer with an expansive footprint of nearly 100 stores nationwide and an extensive online portfolio. Priced around $15.80, this stock recently witnessed a staggering 24% surge, sparked by the exceptional Q4 financial report that unveiled a 6.8% quarterly revenue growth and anticipated 2 to 4% growth for the year 2024.

Underneath these dazzling financial performances lies a series of significant milestones from the past year, with Arhaus spearheading 11 new showroom openings and eight renovation projects to bolster its brand visibility and national presence. Despite the transient price spike following its Q4 disclosures and growth directives, Arhaus remains an undervalued gem, beckoning astute investors to partake in its promising journey ahead.

Floor and Decor (FND): Elevating Expectations

The Rise and Resilience of Floor and Decor (FND)

Breaking Down Distinctive Strategies

In the world of hard flooring, where every investor looks for a solid foundation, Floor and Decor (FND) stands as a beacon of excellence. Far from the mammoth shadows cast by competitors like Lowe’s and Home Depot, FND shines bright with its intricate tapestry of offerings. Priced elegantly at around $120, this stock exudes a quiet confidence, much like a hidden gem waiting to be unearthed. Over the past year, FND has not just grown steadily but bloomed exponentially, akin to a resilient perennial plant that thrives against all odds.

Cutting Costs with Direct Supplier Relationships

Within the mosaic of its success lies a unique supplier relationship system that sets FND apart. By cutting out the middlemen and procuring directly from the source, FND not only secures hefty discounts through bulk purchases but also manages to retail its wares at prices that would make other stores blush crimson. This strategic move not only bolsters FND’s bottom line but also endears it to savvy shoppers looking for quality without breaking the bank.

Expansions and Acquisitions: Fortifying the Foundation

The story of Floor and Decor is not just one of survival but of expansive growth. With 221 locations sprinkled like confetti across the U.S. landscape and five design studios that stand as pillars of creativity, FND has truly stretched its wings. Just last year, in a move reminiscent of a chess grandmaster, FND acquired Salesmaster, a flooring solutions company, to enhance its inventory and fortify its supply chain. This strategic maneuver not only showcased FND’s foresight but also painted a picture of a company willing to evolve and adapt in a dynamic market setting.

Looking Ahead with Bright Prospects

As the financial year unfolded, FND unveiled a blockbuster performance. A jaw-dropping EPS of $0.34 from Q4 and a 3.5% surge in net sales from fiscal 2023 sent ripples of excitement through the investor community. With the promise of more stores unfurling their banners this year and a tantalizingly low valuation, FND seems poised for a prosperous journey ahead. The allure of real profits beckons like a siren’s call, tempting investors to ride the wave of Floor and Decor’s success story.

On the date of publication, Joel Lim did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Lim is a finance freelance writer who writes content for several companies like LTSE and Realtor, along with financial publications, including Mises Institute and Foundation for Economic Education.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.