Lowes Stock Price: Profiting On Disaster - And On Good Times
Lowes may be one of the greatest success stories of this century. By taking advantage of a booming housing market, and an even more booming do-it-yourself mentality in America, Lowes has become one of the nation's primary building suppliers for the homeowner, and also one of the best stocks to own overall. The Lowes stock price has risen steadily for nearly two decades now and doesn't seem ready to stop yet. With its center mostly in the southeast, Lowes has steadily expanded west, infringing on territories previously held primarily by Home Depot. And with that expansion's beginning several years ago, a stock split was announced. The Lowes stock price shot up. How could the average investor predict this sort of occurrence? By following the economy. Lowes made the wise decision to follow Home Depot and focus on the smaller and more diverse, but largely untapped, regular homeowner market. And when the housing market hit its first boom, they profited. Other companies made money on the building boom in the 90s by profiting on the builders' increased demands, but Lowes made money after the house was sold from homeowners seeking to modify and improve the homes they had. The reasons for pulling out of the builders' market and the reason for entering the homeowners' market were the same: prefabricated housing and offshoring. Instead of the traditional model followed up through the 1980s of building a house to spec from scratch on site, builders started applying industrial models of efficiency to homebuilding. Why not plan to build a hundred houses from a single plan, wall by wall and brick by brick? And if you're going to do this, why not prefabricate what you can in a central location using assembly line methods, and then ship it to its destination? And if you're going to do that, why use domestic markets for raw materials when you can ship them in from overseas cheaper? So near ports, prefabricated housing (not trailers, but rather quarter-million dollar homes) became a growth industry. And lumberyards and suppliers to builders saw their market shrink. Unlike many of their competitors, the Lowes stock price rose; they'd seen the tide and planned for it. With the cookie-cutter houses being sold to people with money to spend, there would be a need to personalize, to improve, and to change. That became the Lowes mission, rather than supplying the demands of the builders market. Lowes stock prices will probably remain high as long as visionary management runs the company. If you look for companies with this kind of foresight, you'll probably find other great places to invest your wealth.