Home Depot, Comcast Shares Set for Second Half Run

The uneven economy kept stocks grounded in the first half of 2015. Expect lift-off in the coming months as growth picks up, said Dan Skelly, Head of Equity Model Portfolio Solutions at Morgan Stanley Wealth Management. 'With the Greek issue hopefully off to the sidelines for now and the Chinese market stabilizing here, we think headline risk has also diminished proving to be some upside potential for the market,' said Skelly. Skelly is particularly bullish on Home Depot (HD), despite the fact that the home improvement juggernaut has already seen its shares rise 45% in the past year and now trades at an above-market multiple of 19 times next year’s earnings. He was also undaunted by the fact that retail sales declined 0.3% from the prior month to a seasonally adjusted $442 billion in June, according to the Commerce Department Tuesday. Wall Street economists expected a 0.2% rise in June. 'We have seen a tepid retail sales environment overall, but within that we think home improvement is an area of strength,' said Skelly. 'When you look at the past couple of months you’ve seen housing data improve substantially.' Skelly added that Home Depot has been taking share from its competitors, posted impressive 7% same store sales growth in its most recent quarter and pays a healthy 2.1% dividend in a low yield environment. He is also positive on cable provider Comcast, up 8.7% year-to-date, even though the company was not able to complete its acquisition of Time Warner Cable.