Help. Selection of companies for peer group
Hi
I am about to try relative valuation and ratio analysis, but I am having difficulty considering which companies belong to the peer group. From what I have read, it seems that companies are considered comparable when they are from the same industry. I have also learned that companies must have the same market.
I was looking for companies that I can compare with Home Depot. Using finviz, I found that home improvement industry included the following companies:
1 Floor & Decor (hard surface flooring and related accessories)
2 Home Depot (building materials, home improvement products, lawn and garden products)
3 Lumber Liquidators (hardwood flooring)
4 Lowe's (building materials, home improvement products, home furnishings, garden equipment, lumber)
5 Tile Shop (stone tiles, maintenance materials)
Although they belong to the same industry, they don't have the same products. The closest to HD is Lowe's while the rest seems to have little to no similarity in products with HD. Is it valid to include FND, LL, & TTS to the peer group or industry average? Are there more companies to include to this peer group?
I looked into the annual report using the find function for competitors, but I didn't find any. I have yet to try looking into equity reports on HD.
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Choosing peer group companies (Originally Posted: 01/23/2018)
I have to do competitive positioning analysis of a mining company which focuses on copper mining/production. The company also produces some other metals as by product. The share of company in global copper industry is very small-less than 0.5%. How can i develop peer group? What factors should i look at?
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