Here’s Why Office Depot’s Stock is SMOKING HOT
Office supply chains are sometimes seen as an indicator of economic health. If the economy is only doing a little bit better than it was a year ago, these businesses should reflect the climate.
Office Depot (NYSE:ODP), the number two retailer in the space, has seen the most growth with earnings before interest and taxes expected to be between $125 and $135 million. This is growth of $5 to $10 million from 2011. This success is attributed to cost cutting measures, as sales of office supplies have suffered recently. Regardless, investors love the news and are pushing shares higher 19.25% today.
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OfficeMax (NYSE:OMX) expects sales to be flat or slightly higher than those of last year. Investors barely cared. The stock crept up .3 percent to $5.95. OfficeMax is trying to clean up its balance sheet by offering pensioners a lump sum.
Staples (NASDAQ:SPLS), which was arguably hurt the most this year and saw a new drop in its stock price in August, remains the largest retailer in the space.
Sales at all three companies will continue to suffer. If Office Depot can continue to keep costs down, it could keep its edge against competitors which have flat-lined with the economy.
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