A Look at Office Depot Without the Merger

E = Equity to Debt Ratio Is Normal            

The debt-to-equity ratio for Office Depot is normal. The balance sheet is in fine condition. Cash flow is solid. Office Depot has operating cash flow of 263.97 million, and levered free cash flow of $297.34 million.   

Debt-To-Equity

Cash

Long-Term Debt

ODP

0.63

$619.53 Million

$671.11 Million

OMX

0.90

$506.02 Million

$971.39 Million

SPLS

0.27

$1.02 Billion

$1.66 Billion

 

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T = Technicals on the Stock Chart Are Mixed    

The past three years have been unkind to Office Depot. However, you could say the same for its competitors. The past year has been incredibly strong for Office Depot in regards to stock performance, but keep in mind that it came from a very low point of $1.51. As far as yield goes, it doesn’t exist for Office Depot, but it does exist for OfficeMax and Staples, which offer yields of 0.70 percent and 3.40 percent, respectively.

1 Month

Year-To-Date

1 Year

3 Year

ODP

11.40%

57.93%

58.90%

-21.16%

OMX

18.96%

34.93%

130.50%

-11.11%

SPLS

12.15%

27.89%

-0.44%

-38.73%

 

At $5.16, Office Depot is currently trading above all its averages.     

50-Day SMA

3.85

100-Day SMA

3.25

200-Day SMA

2.64

 

E = Earnings Have Been Inconsistent                  

Earnings haven’t been impressive over the past few years, but at least they have been heading in the right direction. Revenue, on the other hand, has been heading in the wrong direction. This is a rare combination.

2007

2008

2009

2010

2011

Revenue ($)in billions

15.53

14.50

12.14

11.63

11.49

Diluted EPS ($)

1.43

-5.42

-2.00

-0.23

0.17

 

When we look at the last quarter on a year-over-year basis, we see a decline in revenue and earnings.  

9/2011

12/2011

3/2012

6/2012

9/2012

Revenue ($)in billions

2.84

2.97

2.87

2.51

2.69

Diluted EPS ($)

0.28

0.02

0.14

-0.18

-0.19

 

Let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?