Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- OfficeMax (NYSE: OMX) 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, notable return on equity and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- Compared to its closing price of one year ago, OMX's share price has jumped by 92.02%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, OMX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- 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.
- OMX, with its decline in revenue, underperformed when compared the industry average of 19.9%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- OFFICEMAX INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings 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 89.4% in earnings ($0.50 versus $4.71).