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By Jason Stipp and Jeremy Glaser | 11-20-2015 09:00 AM

Friday Five: 2 Bargains in Retail

Home Depot's recent strength is impressive, but TJX and Wal-Mart could be better values for investors. Plus, railroads look to tie up.

Jason Stipp: I'm Jason Stipp for Morningstar. Welcome to The Friday Five, Morningstar's take on five stories in the market this week.

Joining me with the Friday Five is Morningstar markets editor Jeremy Glaser.

Jeremy, thanks for being here.

Jeremy Glaser: You're welcome, Jason.

Stipp: We had a lot of retail results this week. Let's start with Home Depot. They had fantastic results, so much so that you wonder if people are only shopping at Home Depot.

Glaser: Maybe it looks that way. After some really poor results at some of the apparel retailers, department stores like Macy's, we got great results from Home Depot: 5% same-store sales growth. This wasn't driven just by one region or one small area. It was nationwide. They saw a lot of strength across geographies and also across product categories--something that bodes well for them and is another sign of strength in the housing market as well.

Jaime Katz, our Home Depot analyst, thinks they even have more room to grow from here. When you look at their continued push into the more professional space and into e-commerce, you certainly see some potential upside for Home Depot.

Unfortunately, a lot of that is priced into the shares right now. We think they look a little bit expensive--not ridiculously so--but investors are probably better off waiting before diving in.

Stipp: Retailing giant Walmart also reported results. They've been in the middle of a turnaround. But they had some decent results as well. Are we starting to see their turnaround efforts paying off?

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