LL is a company that falls in the small Home Improvement Stores Industry. This industry does better when home ownership is up and home improvement work is on the rise. Stats suggests that home improvement / DIY is on the rise fro the 13 consecutive quarter. This bodes well for stocks in the industry.
LL’s chart on a weekly shows a nice bottom and the stock’s price is consolidating at bottom completion. This is a good sign as for us it identifies that large institutional buying presence. Price was controlled for almost 2 years indicative of a liquidity draw of shares of stocks. Price then begins to move up out of the base the beginning of this year.
Looking at the stock on a monthly also shows a u bottom formation. Bottoms are always created by large institutional buying of shares.
Looking at the percentage of shares held by institutions, we see our analysis confirmed. 80% ownership with an increase in new positions over the last quarter.
We also look to identify which institutions (buy side vs. sell side) are holding the most shares. Buy side intuitions are the value investors and that’s whom we want to follow.
Next we need to verify the financial strength or improvement of LL. By reviewing quarterly financial data, we can identify if sales and profit are improving quarter over quarter.
This is another step of confirming the company’s strength in their business cycle.
Lastly, we take a look at the most recent press release for information on next quarter guidance and any new products being available:
The CEO speaks sternly about improving on the long term company strategy. There is no guidance for the next quarter but it cam be assumed by all the large institutional buying that the company will continue to improve its bottom line and sales.
Using the above parameters with all stock analysis will help you to determine which companies are potential candidates for your position holds. Message us with any questions of picks you are currently holding.