Rating Change #2
has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, notable return on equity, attractive valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- Powered by its strong earnings growth of 966.66% and other important driving factors, this stock has surged by 161.81% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 955.0% when compared to the same quarter one year prior, rising from $5.39 million to $56.84 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Specialty Retail industry and the overall market, OFFICEMAX INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- OFFICEMAX INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, OFFICEMAX INC increased its bottom line by earning $4.71 versus $0.37 in the prior year. For the next year, the market is expecting a contraction of 83.2% in earnings ($0.79 versus $4.71).
OfficeMax Incorporated, together with its subsidiaries, distributes business-to-business and retail office products. The company has a P/E ratio of 2.5, below the S&P 500 P/E ratio of 17.7. OfficeMax has a market cap of $1.02 billion and is part of the services sector and specialty retail industry. Shares are up 18% year to date as of the close of trading on Wednesday.
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