Portfolio rehab via The Home Depot, Lowes?

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The home-improvement industry has been in the dumps, but prospects for growth for home-improvement retailers are building, if a report released by the Remodeling Futures Program at Joint Center for Housing Studies at Harvard University serves as an indicator.

The report predicts a surge in work to make homes more energy-efficient, to maintain their structure and to remodel foreclosed properties.

The RK Investment Advisors’ fund currently owns The Home Depot (NYSE: HD; Price: $22.83), in part because the housing market has driven down share prices to what Randy Kurtz, chief investment officer, believes are “unreasonably low levels,” off from a 52-week high of $42. He expects poor performance in 2009 but doesn’t expect the price to fall as a result.

But not so fast, says Wade Slome, president of Sidoxia Capital Management. The Home Depot and Lowes (NYSE: LOW; Price: $19.70) “are definitely closer to price troughs than they are to price peaks. I believe investors would be better served by waiting for six months before they sift through the housing rubble.”