Jon Najarian says when the market rallies you want to buy underperformers. So which underperformers is he looking at buying into year’s end? Here’s the short list: UnitedHealth (UNH): up 9% in 2009 Becton, Dickinson (BDX): up only 9% year to date, Lowe’s (LOW): up only 2% year to date.

The housing starts data doesn’t mean good things for Home Depot (HD) or Lowe’s (LOW), adds Jon Najarian. But I 'do' like these stocks as plays on people staying in their home longer and fixing them up into 2010.

Buy - Price 21.47 on Nov. 13
by Jefferies & Co.

Our 26 target is based on the shares' selling at about 20 times our fiscal-year 2011 EPS estimate of $1.30. This compares to [a] historical three- and five-year P/E of 15.06 times and 15.37 times, respectively...We continue to build in an early-cycle multiple premium [for the home-improvement retailer], as we believe the market will be willing to assign a premium on depressed earnings as long as housing trends continue to show signs of improvement. Risks include: potential for renewed deterioration in housing, competitive promotions, softer-than-expected new-store productivity, potential declines in vendor support if unit volumes remain soft, and continued expense deleverag[ing] on soft sales. Market cap: $31.8 billion.

I work there.

In every single case I can spin every single piece of data negative. There are no pure positives. Target (TGT), Wal-Mart (WMT) and Kohl's (KSS) say back to school is good? A whole host of little ones say it is bad. Home Depot (HD) says things are getting better but Sears (SHLD) and Lowe's (LOW) can't say that.

Another headline warned that Home Depot (HD), a stock which Cramer owns for his charitable trust, Action Alerts PLUS, and Lowe's (LOW) were also feeling the pinch. "But that's false," said Cramer, given that Home Depot raised its guidance Tuesday and is clearly outperforming Lowe's.

industrial recovery

But Home Depot (HD), Lowe's (LOW) and Sears (SHLD) have turned, and there's some strength being shown in the companion restaurant group -- Darden (DRI) and Yum! Brands (YUM) -- so maybe we are seeing the beginning of the gasoline rally!

Cramer said we're seeing what he calls a "gasoline rally" in stocks such as Darden (DRI), Coach (COH), Tiffany (TIF), Sears (SHLD), Lowe's (LOW) and Yum! Brands (YUM).

"This is all the same trade that we saw when gasoline broke from $4 down to $2 last year," he said. "It's happening again." Read more here.

same

It's really over-rated

It will turnaround not anytime soon though

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public perception

Slow housing mkt

Lousy service, expensive than HD

I meant Pella Windows.....the last three wouldn't shut all the way.

I don't like the Palla windows they sell.I wish they wouldn't sell them.I called the corp. office about my problem with the windows from Pella.I feel if more people call we can get a better brand in the stores.

Residential home market growth

I own this...... BUT if people aren't buying home, and getting the SUB PRIME LOANS as steady as they were in the past how could one assume they can afford to fix up there homes.you may see the cars in the parking lot but that doesnt mean their buying enough to pay their bills