Which of These Top 3 Office Supply Stocks are Winning the Earnings Game?

March 11, 2013

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Earnings trends are extremely important while evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then, we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

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Here’s your Cheat Sheet to how the top 3 office supply stocks rank via earnings trends:

Office Depot, Inc. (NYSE:ODP): Current Price $4.13

Fiscal Year	2008	2009	2010	2011	2012
Revenue ($) in millions	14,500	12,140	11,630	11,490	10,700
Diluted EPS ($)	-5.42	-2.003	-0.30	0.22	-0.39

Office Depot has turned in a loss per share every year except in 2011. Unfortunately, 2012 saw a sharp drop in EPS as well as turnover.

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Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter	Dec. 31, 2011	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2012
Revenue ($) in millions	2,970	2,873	2,507	2,693	2,623
Diluted EPS ($)	0.0751	0.14	-0.1779	-0.1916	-0.1605

There is no let-up in the losses in the quarterly reports either, and we drop Office Depot from consideration in this analysis…

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