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Tickers in this Article: BBBY, LOW, HD, WMT, SHLD
Although the domestic economic rebound will almost undoubtedly be filled with several fits and starts, it is likely that middle-of-the-road consumers will be spending a little more money around their homes and on sprucing up their personal businesses. For that reason, shares of home improvement retailers such as the wildly popular Home Depot (NYSE:HD) and Lowe's (NYSE:LOW) are becoming more interesting. Another company that deserves a look is Bed, Bath & Beyond (Nasdaq:BBBY), which carries a variety of interesting items for the home.

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Why Bed Bath Warrants A Shop
From a macro standpoint, many families are still struggling. But some are becoming more liberal in their spending and many will have to replace existing cookware, curtains and bath related items which logically should work in the company's favor. As things stand right now, the company has been performing well in spite of a competitive environment and the overall cruelty of the recession.

The company has beat out expectations four quarters straight and is expected to earn a respectable 73 cents a share in its fourth quarter, scheduled for release on April 5. It seems likely that it will continue the trend and exceed expectations once again. Hopefully the company will offer an optimistic outlook for this year, as that could draw even more interest to the shares. (For more on analyst expectations, be sure to read Analyst Forecasts Spell Disaster For Some Stocks.)

Note that the shares are trading near their 52-week highs. While some may be scared off by this, there is also some potential opportunity here. If it can make a new high it will likely garner the attention of analysts and institutional money managers and possibly new investors.

Other Companies To Benefit From The Comeback
Both Lowe's and Home Depot may see improving sales as homeowners work on new projects and improve what is likely the most valuable asset they will ever own. The spring and summer seasons should only enhance interest in new around the home projects. Lowe's and Home Depot can be had for 17.8 times their current year's estimate. That's not incredibly cheap, but given their potential for growth and the likelihood for improved results in the near-term it seems like a good deal.

Of course some view Wal-Mart (NYSE:WMT) as a competitive threat to Bed Bath & Beyond, and it is to a degree. But BBBY's selection is much wider and it has a nice niche. However, the pie is big enough for both of these players.

Sears Holdings (Nasdaq:SHLD), is another player worth keeping an eye on. While its Kmart stores may have trouble competing in the discount space in the long run, its Sears locations may see a boost in traffic thanks to its home appliances and a serious foothold in tools that do-it-yourselfers find attractive.

The Bottom Line
As the domestic economy claws its way back from one of its most difficult periods, these are some of the companies that are likely to benefit. Bed Bath & Beyond stands out because of its depth in merchandise selection, its recent ability to beat earnings and its potential for growth over the next year and beyond as consumers increasingly spend on their homes and businesses.

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