4 Stocks To Watch Before The Market Opens Tomorrow - August 16, 2016

Home Depot (HD): The broader recovery in the housing market and focus on improving customer engagement have been key to Home Depot’s recent winning streak. The home improvement retailer has outperformed the Estimize consensus in each of the past 3 quarters and counting. With new and existing home sales making further strides, don’t expect a disappointment tomorrow. An improved housing environment can largely be attributed to low interest rates. As both the number of homes sold increases, and home prices stay high, that will continue to drive traffic to Home Depot stores. Strong job growth hasn’t hurt either, allowing consumers to spend on home improvement projects.

Dick’s Sporting Goods (DKS): Despite soft earnings growth, shares are up 55% year to date. A large portion of that comes from the Sports Authority bankruptcy and asset liquidation. In late June, Dick’s won an auction to buy the rights to the Sports Authority brand name and intellectual property for $15 billion. For an extra $8 million, Dick’s acquired 31 Sports Authority leases, complimenting its current expansion plans. Between opening new physical stores and boosting its omni channel capabilities, Dick’s believes its well equipped for future growth.

The TJX Companies (TJX): TJX has been largely resilient through rising popularity of online retailers. They’ve seen modest growth the past few quarters driven by improving traffic trends, solid comparable store sales growth and higher margins. Increased marketing and promotional initiatives can be credited with this recent uptake. The acquisition of Sierra Trade Post adds a new layer of revenue and a means to widen its worldwide footprint.

Advance Auto Parts (AAP): Earnings the past few quarters have fallen short of expectations thanks to a marked slowdown in sales. Revenue growth has come in negative for two straight quarters with current estimates expected to make it a third. The largest drivers of this downturn have been increased competition and rising new vehicle sales. The current environment makes it easier to buy a new vehicle rather than fixing an old one. AAP’s focus on store expansion is expected to drive visibility and brand recognition, thereby driving sales. The company really hasn’t seen those efforts pay off yet.