Relational Investors' Whitworth Comments on Home Depot's (HD) Nardelli News

Today's big news is the "resignation" of Bob Nardelli from Home Depot. Relational Investors, LLC Ralph Whitworth gave an interview on CNBC about its stance on the news. Relational recently sent a letter to Home Depot recently requesting changes, which the company disclosed in December. Link

On CNBC, commenting on today's news that Home Depot (NYSE: HD) CEO Bob Nardelli has left, Ralph Whitworth of Relational Investors, LLC, a firm that has been pushing for changes at the home improvement giant, said the news paves the way for strategic changes at the company. Whitworth said the stock is 50% undervalued and said his firm will continue their efforts.

Whitworth said the big questions is what Home Depot is going to do with their enormous cash flow. He said if the company continues on the same path they will continue to pressure the company. Whitworth wants the company to stop spending money on the supply business and instead use the money to buyback stock. He said the company is unlevered and can take on 20%-30% leverage, which they can also use for buybacks.

Whitworth said he was not completely surprised the company changed its support for Nardelli.

Whitworth said his firm has not yet met with the company, but plans to in next few weeks. He said the company needs fresh blood on the board, and said his firm intends to push to nominate their representatives.

NOTE: We will publish the link to the CNBC video when it is updated at CNBC.com