Office Depot (ODP) Flagged As Strong On High Volume

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 strong on high relative 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 $35.7 million.
  • ODP has traded 1.5 million shares today.
  • ODP is trading at 4.71 times the normal volume for the stock at this time of day.
  • ODP is trading at a new high 4.04% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on ODP:

Office Depot, Inc., together with its subsidiaries, supplies office products and services. Currently there are 4 analysts that rate Office Depot a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Office Depot has been 6.7 million shares per day over the past 30 days. Office Depot has a market cap of $2.8 billion and is part of the services sector and specialty retail industry. The stock has a beta of 2.83 and a short float of 10.2% with 6.75 days to cover. Shares are up 2.8% year-to-date as of the close of trading on Tuesday.

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

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 robust revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • ODP's very impressive revenue growth greatly exceeded the industry average of 0.5%. Since the same quarter one year prior, revenues leaped by 58.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Net operating cash flow has significantly decreased to -$88.00 million or 28942.90% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 252.3% when compared to the same quarter one year ago, falling from -$54.21 million to -$191.00 million.

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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