We are buying 55 shares of Stanley Black & Decker at roughly $93.98. Following the trade, Jim Cramer’s Charitable Trust will own 740 shares of SWK, increasing its weighting in the portfolio to 2.27% from 2.10%. We are making a small buy of SWK, slightly violating our average cost basis of $90.22. Shares are down about 4% year to date as many of the late 2023 “broadening out” rally winners have taken a slide since the recent bounce in interest rates. Shares of this hand tool maker tend to have an inverse relationship with rates because of its ties to the housing market, especially existing home sales. The concept is simple: When people move into an older home, they are more likely to put more money into it and take on remodeling projects. Some of Stanley Black & Decker’s leading brands are DeWalt, Black + Decker and Craftsman. Even though the stock is down slightly this year, we see more signs that the home improvement market will rebound after a tough few years. Piper Sandler reinforced this call earlier Tuesday in a detailed note when it upgraded its rating on Home Depot . The main reason for Piper Sandler’s call is stabilizing home equity extraction, which is when a homeowner takes out equity from the value of their home through a loan— extra cash often used to fund a large remodeling project. As Piper points out, home equity extractions have declined because of higher interest rates. However, analysts think it will return to growth in the first quarter of this year based on improving mortgage refinance applications. And if mortgage rates stabilize at these levels, Piper thinks extractions will grow “modestly” this year. The real bullish trend will be if rates fall even further, creating what Piper calls a “meaningful” extraction cycle considering the firm’s estimate of a near-record $10.6 trillion of tappable equity. All of this is very positive for the home improvement industry at large and Stanley Black & Decker, a company that has spent the past year and…
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