Trade-Ideas: Office Depot (ODP) Is Today's "Dead Cat Bounce" Stock
Trade-Ideas LLC identified
(
) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Office Depot as such a stock due to the following factors:
- ODP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $131.5 million.
- ODP has traded 853,094 shares today.
- ODP is up 3% today.
- ODP was down 5.1% yesterday.
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More details on ODP:
Office Depot, Inc., together with its subsidiaries, supplies office products and services. It operates in three segments: North American Retail, North American Business Solutions, and International. ODP has a PE ratio of 351. Currently there is 1 analyst that rates Office Depot a buy, 1 analyst rates it a sell, and 7 rate it a hold.
The average volume for Office Depot has been 15.0 million shares per day over the past 30 days. Office Depot has a market cap of $1.9 billion and is part of the services sector and specialty retail industry. The stock has a beta of 2.79 and a short float of 3% with 0.42 days to cover. Shares are down 41% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Office Depot as a
. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, poor profit margins and weak operating cash flow.
Highlights from the ratings report include:
- OFFICE DEPOT INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, OFFICE DEPOT INC turned its bottom line around by earning $0.01 versus -$0.67 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus $0.01).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 2.2% when compared to the same quarter one year prior, going from $45.00 million to $46.00 million.
- Net operating cash flow has significantly decreased to -$139.00 million or 202.17% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- ODP's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 61.51%, which is also worse than the performance of the S&P 500 Index. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- You can view the full Office Depot Ratings Report.
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