Reply #18: If I knew, my ESPP contribution would be higher than 2 percent! [View All]

[jmowreader]

This isn't exactly "insider information"--you can get it from any number of SEC filings--but it's good to know when trying to figure out why Home Depot stock doesn't move around much.

According to my last store manager, there are two major groups that hold our stock: employees of the company, and institutional investors. You'll find the stock in broad-market funds like index funds, and in mutual funds that invest in the building materials industry. About eight percent of the stock isn't in one of those two groups.

Employees and institutional investors have one thing in common: they buy and hold. Stocks that are bought and held, hold their value. We're a bit like the utilities of old: you didn't buy shares in the water works because you wanted to get rich quick but because you needed a safe investment. (This with the caveat that "safe investment" is right up there with "jumbo shrimp.")

The last time we really had a major correction in the price of our stock was a couple of years ago when the institutional investors decided we weren't spending enough on technology and dumped the stock. We spent and they came back.

I wish I had a better answer, but the stock doesn't move around much.