Lowe’s (LOW_) 24, 98 reported third quarter results for the period ending November 2, 2007.  Per share earnings of $0.43 were a 6, 9% drop from a year earlier.  The decline was the result of pressures on consumers and the consequences of tightening mortgage lending stemming from the disaster following sub-prime lending defaults. 

Sales rose 3.2%, but pre tax profits declined 11.9% on lower profit margins.  LOW says it continues to do better than Home Depot.  Low’s says it continues to gain unit market share in its industry, adding a full percentage point while HD reported declines of nearly four percentage points. 

The price of the stock has been in a down trend since the spring of 2007. Full fiscal year EPS are estimated at $1.83 to 2.01 down from previous projections of $1.97 to $2.01. At this time analysts are estimating next year’s EPS at $2.01.  Future results are highly dependant on how the mess resulting from securitizing sub-prime loans eventually works out.  

I own LOW as does my investment club.  We take the long-term view that LOW is the best in its industry and that growth will eventually resume. At the recent price of 24.95 and estimated EPS of $2.01 for fiscal 2008. The relative value is 74.4% and the P/E ratio is 12.4.  For investors who are patient and take the long-term view LOW is a bargain.