Mr. David Gordon

GLG News^SM Analyses by David Gordon

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Construction Forecast - Electrical Focus

November 22, 2009

Analysis of:Falling aggregates and cement sales points to deeper recession | www.cnplus.co.uk

The downturn in the electrical industry is currently forecasted to be down for awhile - in fact 2013 revenues are projected to be less than 2006, and that includes inflation and the gyrations in the commodity markets!Commercial construction is expected to be down 10-15% nationally next year. There will be a slight improvement in residential (could it get lower), industrial MRO is supposed to improve and the "savior" is instituitonal spending (government, eduction, healthcare).

Is $210M Relevant?

January 10, 2007

Analysis of:A $210 Million Parachute | www.thestar.com

Much has been written and said about Nardelli's severance package vs. his accomplishments at Home Depot.  He has had some successes, but when it is compared to Lowe's from a Wall Street perspective, he lagged.  Did the Board decide to enter 2007 with a clean slate? Is he a victim of arrogance (witness the 2006 shareholder meeting)? or did he know that things weren't going to get better in the near future (although the housing market seems to have stabilized)?

Only time will tell, but the important question is "does HD's strategy need to change?"

Home Depot Buying at Top of the Market

August 22, 2006

Analysis of:Home Depot Profit Rises on Sales to Professional Builders | www.bloomberg.com

Home Depot recently announced its Q2 results which were positively received due to sales and profit growth.  Its HD Supply division was bolstered with its Hughes Supply acquisition.  While the company expects to grow its business through acquisitions of distributors to stabilize revenues, with the decline of the residential market and the boom in commodity pricing, is Home Depot buying at the top of the market and how does the company's knowledge of retail translate to an understanding of distribution markets where relationships and project management are key?  How does a company that is used to double digit net margin in a retail business manage distribution businesses that are lucky to achieve 5% net margins ... and manufacturers are already providing Home Depot the lowest acquisition costs and highest rebates in the industry?

Emerging Giants Buy-In or Sell Direct

August 21, 2006

Analysis of:Emerging Giants | www.businessweek.com

The article focuses on the threat from international companies to enter the U.S. market with lower cost and/or more effective products for the industrial markets.

A number of examples are highlighted, but the trend in them is that the “new” company sells direct, sells to only a few customers (i.e. Home Depot) or has bought an incumbent.

While the threat is significant to disrupt the market, the greatest threat is that price (and margins) will decline although minimal market share will change unless the international firm buys into the market as the distribution channel is the key to success for these companies.

An Electrically Green House Means More High Tech

August 18, 2006

Analysis of:Energizing a 'green' movement: Brokers, builders tout environmental focus as home energy costs soar | www.marketwatch.com

The article focuses on the increased interest in energy efficiency, especially for homes.  While consumer mindshare of the issue has increased significantly due to increased energy costs and the advent of Eco-brokers, the current product marketplace is somewhat limited, and in many cases expensive, but a niche opportunity is available for those who focus on it.

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