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Top Stock Picks for Week of July 31, 2023

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The Home Depot Inc. (HD - Free Report) is the world’s largest home improvement specialty retailer. Shares of Home Depot outpaced the industry in the past three months. Home Depot has been witnessing significant benefits from the execution of the “One Home Depot” investment plan, which focuses on expanding supply chain facilities, technology investments and enhancement to the digital experience. The interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters. The company remains on track with its strategic investments to build a Pro ecosystem. Home Depot will be looking to display strength as it nears its next earnings release, which is expected to be August 15, 2023. Home Depot has a disciplined capital allocation strategy, supported by solid free cash flow generation capability. This allows management to undertake shareholder-friendly moves.

The Sherwin-Williams Company (SHW - Free Report) is into manufacturing and sales of paints, coatings and related products, primarily in the North and South America. Sherwin-Williams’ adjusted earnings and sales for the second quarter beat the respective Zacks Consensus Estimate. It is expected to benefit from favorable demand in domestic markets, which will likely support sales volumes in the quarter. Increased sales volumes in the Paint Stores Group division indicate a larger market share. In addition to driving sales, the company is implementing cost control initiatives and adopting various supply chain optimization techniques to enhance its margins. These efforts aim to improve operational efficiency and offset rising costs. The acquisition of Valspar has also strengthened its position as a global leader in paints and coatings. It has provided the company to enter profitable market with highly complementary offerings, strong brands and breakthrough technology.The company is focusing on restructuring, which is expected to provide benefits in 2023.  


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