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Does Lowe’s Companies (LOW) Have Attractive Valuation?

Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Strategy” first quarter 2024 investor letter. A copy of the same can be downloaded here. The composite returned 7.63% gross of fees (7.56% net of fees) in the first quarter trailing the 8.99% return of the Russell 1000 Value Index and the 10.56% return of the S&P 500 Index. Security selection and allocation effects led the composite to underperform in the quarter relative to the Russell 1000 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Aristotle Capital’s Value Equity Strategy featured stocks like Lowe’s Companies, Inc. (NYSE:LOW) in the first quarter 2024 investor letter. Headquartered in Mooresville, North Carolina, Lowe’s Companies, Inc. (NYSE:LOW) is a home improvement retailer. On April 12, 2024, Lowe’s Companies, Inc. (NYSE:LOW) stock closed at $232.05 per share. One-month return of Lowe’s Companies, Inc. (NYSE:LOW) was -4.69%, and its shares gained 13.20% of their value over the last 52 weeks. Lowe’s Companies, Inc. (NYSE:LOW) has a market capitalization of $132.775 billion.

Aristotle Capital’s Value Equity Strategy stated the following regarding Lowe’s Companies, Inc. (NYSE:LOW) in its first quarter 2024 investor letter:

"During the quarter, we sold our positions in Phillips 66 and Sysco and invested in two new positions: Lowe’s Companies, Inc. (NYSE:LOW) and TotalEnergies.

Based in North Carolina, and with a history dating back to 1921, Lowe’s Companies is the world’s second-largest home improvement retailer (after Home Depot). The company operates more than 1,700 stores in the United States that offer a wide variety of products to enhance a home, from plants for the garden and house décor to hardware and appliances. Often located in suburban areas, Lowe’s stores primarily serve retail “do-it-yourself” customers (~75% of revenue) and sell products that are used for home maintenance and repair (over 60% of revenue). This contrasts with Home Depot, whose stores have a higher presence in metropolitan areas and cater more to professional customers.

We had previously been investors in Home Depot. Over much of the past decade Home Depot had, in our opinion, executed better than Lowe’s—expanding its presence with large professional customers and increasing its store productivity. However, with Lowe’s hiring of former Home Depot executive Marvin Ellison in 2018, we believe Lowe’s has started the process of closing the gap to better compete with its nearest rival..." (Click here to read the full text)

A family selecting a wood and wire closet organization in a home improvement store.

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Lowe’s Companies, Inc. (NYSE:LOW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Lowe’s Companies, Inc. (NYSE:LOW) was held by 68 hedge fund portfolios, compared to 63 in the previous quarter, according to our database.

We previously discussed Lowe’s Companies, Inc. (NYSE:LOW) in another article, where we shared the list of magnificent dividend growth stocks to buy and hold forever. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.