Office Depot (ODP): Heavy Pre-Market Activity

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.

Trade-Ideas LLC identified Office Depot ( ODP) as a pre-market mover with heavy volume 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 $29.4 million.
  • ODP traded 697,093 shares today in the pre-market hours as of 8:00 AM, representing 10.6% of its average daily volume.

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More details on ODP:

Office Depot, Inc., together with its subsidiaries, supplies office products and services. ODP has a PE ratio of 42.8. Currently there are 4 analysts that rate Office Depot a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Office Depot has been 9.6 million shares per day over the past 30 days. Office Depot has a market cap of $1.5 billion and is part of the services sector and specialty retail industry. The stock has a beta of 2.96 and a short float of 17.3% with 5.19 days to cover. Shares are down 2.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Office Depot as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • 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 359.9% when compared to the same quarter one year prior, rising from -$61.92 million to $160.90 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The gross profit margin for OFFICE DEPOT INC is currently lower than what is desirable, coming in at 26.01%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.14% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$25.56 million or 111.83% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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