Home improvement giant Home Depot (HD) has not exactly been shy about buying major corporations and adding their various components to its collective arsenal. Now, Home Depot picked up Simpl Automation in a bid to improve its warehouse operations. Investors applauded and bought in, sending Home Depot shares surging up nearly 4% in Friday’s trading.
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No one disclosed terms of the deal, but we do know what it was Home Depot picked up for however much it actually spent. Simpl offers a range of “automated storage and retrieval systems” that handle both person-to-goods and goods-to-person workflows, reports note. It also has a line of lift modules to allow for high-density storage operations, and Home Depot has those and then some. Those who do not believe me need only walk through their lumberyard, and then realize, this all came from somewhere.
Home Depot grew to like Simpl’s line of tools after a pilot program kicked off in Locust Grove, Georgia. Basically, Simpl’s tools improved just about every part of warehouse operations, from reducing product touches to improving both cycle times and pick speeds. That will certainly improve Home Depot’s own operations, and give Home Depot access to a new line of products to sell.
An Inside Job
Home Depot has long had issues with shoplifters. Most retail facilities do, to one extent or another. But Home Depot’s shoplifters have become highly organized, supremely efficient operations that hit Home Depot for millions at a time. One report emerged to note just how organized one such ring actually was.
Littleton, New Hampshire saw a series of thefts that netted thousands of dollars, reports noted, but a new wrinkle emerged just recently. It turns out that the Littleton thefts were supported by an employee at the store, Keith M. Gillilan of Lisbon. Gillilan was charged with a Class B felony count of “…participating in an organized retail crime enterprise.”
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HD stock based on 17 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 5.04% loss in its share price over the past year, the average HD price target of $425.06 per share implies 21.27% upside potential.
