Lowes Fourth Quarter Report – 2007
Lowes (LOW) released it’s fourth quarter report today with some interesting news. Normally when a company releases a statement saying “lower then last years quarter earnings” the stock decreases. However, because the market has drastically undervalued these stocks they expected even worse news. Therefore, the “lower earnings” were better then expected, according to the market. If that makes any sense?
It’s an interesting point to consider as a Rule One Investor. If the company did worse then last year in the fourth quarter what does that mean?
Well, obviously we need the whole year and the previous 9 years to make an appropriate statement. However, this does show that the growth rate is probably falling. A decreasing growth rate is not something that a rule one investor wants to be concerned with. It makes the business less predictable.
Does it matter that the stock price actually increased? No! It would matter if we were buying or selling the stock, however, I don’t have a position in the stock as discussed when I was selling my Lowes (LOW) stock. The price increase is simply a reajustment because of the undervaluation of the stock.
I am waiting to see the annual report to recalculate the Rule #1 numbers and see if Lowes still qualifies as a rule one stock.
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Monday, February 25th, 2008 at 6:45 pm under