Improvement Required In Home Improvement; Barron’s (LOW, LL, PIR)

Home improvement stocks along with the retail sector have been losing ground lately and are expected to continue losing in the coming weeks, moving opposite to the Dow Jones Industrial Average, which has been considerably up from its early June low. According to Barron’s, Lowes’ LOW stock has been in a considerably worse shape than the retail sector overall. Last week the stock was trading at a four month low and has settled well under the 200 day average. If the poor performance of the stock continues while the market gets better, the stock is unlikely to remain as one of the leaders in the sector. Lumber Liquidators Holding LL has pretty much followed the declining market trend since April. The stock has been trading between $26 and $26.80, which is just pennies below last Monday’s low, putting it in a very critical juncture. However, declining trends are not directly linked to the performance of the company. The stock price of Pier One Imports PIR jumped 7% last week when it announced a quarterly profit. However, the stock price has been declining since then. The reasons for the decline of the home improvement stocks are highly speculated. They may be because of slower than expected recovery in the housing market and lack of investor confidence. By looking at industry trends, it is advisable to avoid the stocks in the industry.