Why I Dumped Home Depot And Went Big Into QXO

My portfolio, which I will soon share on GNG Research, has a super low turnover rate, which means I rarely change positions. That’s because of my long-term mindset and because I only buy ultra-high conviction ideas. Especially after selling Home Depot (HD), which I did on Friday, I now own just 15 individual stocks.  I announced the transaction in the Ask-Leo chat, which I highly recommend readers check out, as I use it as a two-way street. I try to answer as many questions as possible, provide updates on certain new developments, including the latest ISM Manufacturing Index release. It’s a great way for me to inform readers without having to write an article on every single development.  Home Depot was one of the first five dividend (growth) investments I bought when I got serious about dividend investing in 2021. I did not expect to sell it so soon. However, then I found QXO Inc. (QXO), a company that is now my second-largest investment with slightly more than 10% total exposure.  As much as I like Home Depot, its terrific dividend growth track record, and the fact that it gave me exposure to both the housing and consumer markets, I decided to make my portfolio more volatile, as I have become a bit more aggressive in recent years.  QXO is also a housing play, except it’s much younger, way smaller, and run as an M&A vehicle by Brad Jacobs, who I consider one of the smartest entrepreneurs in modern history.  Hence, today, I’ll walk you through my decision, as I explain why I believe QXO is a much better investment for me.  So, let’s dive in! QXO Is A Super Unique Stock Before we get to any numbers, I need to start by telling you who Brad Jacobs is. He’s one of the few people whose passion it is to consistently start new businesses and make them big successes in the industries they serve.  His gameplan is to buy companies in highly fragmented industries that cannot be disrupted by AI (that last factor is new, as AI wasn’t a big thing before 2022). He then uses technology to improve these businesses, boost free cash flow, and buy even more assets.  Essentially, he’s playing real-life Monopoly.  Here are three of his biggest successes: United Waste Systems: Here, he consolidated the waste industry and outperformed the S&P 500 by 5.6x before selling to Waste Management. United Rentals (URI): Brad Jacobs built the world’s largest equipment rental company. The stock became a "200-bagger." XPO Logistics (XPO): He turned a small trucking brokerage into a global logistics giant with a "50-bagger" return. Now, he is doing it again with QXO, as he and his team are targeting the $800 billion building products distribution industry. With that said, the building products distribution industry is perfect for this aggressive M&A strategy, as it’s massive, super fragmented, as no player holds more than 5%, and because many companies are private and running old technology. This provides a lot of low-hanging fruit opportunities, as QXO can buy smaller players and use technology to improve inventory management, route efficiencies, sales, and other things that immediately lead to higher earnings.  Especially in today’s environment, the focus is on AI and other technologies. [Inline image] Source: QXO  On top of that, as we can see in the overview above, there is secular growth from the fact that the average age of homes is very high, which is very bullish for remodeling operations.  For Now, Nobody Cares About Roofing The QXO chart looks very “weird,” as you can see below.  [Inline image] Source: StockCharts (QXO)   That makes sense, as QXO is the result of a takeover. Back in 2024, Brad Jacobs bought SilverSun Technologies. He then paid out the owners and turned it into QXO. The QXO as we know it today is basically Beacon Roofing, which he bought in an $11 billion deal in 2025. Since then, QXO has been officially part of t