HomeDepot (HD) Puts, No Thanks

Someone (not here) mentioned that HD would be reporting sales tomorrow and that they will probably take a beating so it's probably a good time to take some puts on them. Even this article provides the same sentiment. I sort of disagree.

Look at HD P/E for one. It's already hovering at around 11.7, that's pretty low (no pun intended ha ha). Now take a look at it's direct competition LOW, it's P/E is at 12.91 so if anything, HD is the worst of the breed and there's really nowhere left for it to go. Another factor is that HD could come in low, but maybe not as low as expected so it'll probably get a small lift just like LOW is today. I don't know, but that's at least 2 good reasons in my mind why HD is not a sure-fire put play. It might very well melt and get dropped like a rock, but prior to knowing actual earnings and guidance numbers looks to me like an unlikely shot in the dark.

What about the call side? Well LOW said that it would probably continue dropping revenue from now till 2009. So unless you're into the leaps, then even calls don't look too juicy.

What do you think?

--Kevin