Home Sectors Consumer Cyclical Recent Valuation: Office Depot (NASDAQ: ODP)

Recent Valuation: Office Depot (NASDAQ: ODP)

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Office Depot trades as part of the consumer cyclical sector and trades as part of the retail apparel and specialty industry. The company CEO is Gerry P. Smith. Office Depot Inc is a supplier of office products and services. It offers products including office supplies, paper, ink, and tone, cleaning chemical and equipment's, monitors and equipment's, computers and tablets, office appliances, and school supplies.

Previous Intraday Trading Performance:

The ODP stock showed a previous change of 13.49% with an open at 2.66 and a close of 2.86. It reached an intraday high of 3.05 and a low of 2.62.

SeekingAlpha:  Office Depot's (ODP) CEO Gerry Smith on Q2 2018 Results - Earnings Call Transcript

Liquidity:

The stock has a market cap of $1.6b with 557.8m shares outstanding, of which the float is 531.1m shares. Trading volume reached 17,079,857 shares compared to its average volume of 5,790,475 shares. Based on the current average volume and close price, the trading liquidity is bad, highly speculative and an investor may want to avoid this stock.

Historical Trading Performance:

Over the last five trading days, Office Depot shares returned 17.21% and in the past 30 trading days it returned 4.00%. Over three months, it changed 27.37%. In one year it has changed -52.04% and within that year its 52-week high was 6.26 and its 52-week low was 2.00. ODP stock is 43.00% above its 52 Week Low.

Our calculations show a 200 day moving average of 2.81 and a 50 day moving average of 2.69. Currently ODP stock is trading 1.95% above its 200 day moving average and may be a good opportunity to buy.

CNBC:  Office Depot shares jump 13.5% after earnings beat

Earnings:

The last annual fiscal EPS for the company was reported at 0.34 that ended on 31st of December 2017, which according to the previous close, that is a PE of 8.41. Based on 3 analyst estimates, the consensus EPS for the next quarter is 0.04. The TTM EPS is 0.36, which comes to a TTM PE of 7.94.

The following are the last four quarter reported earnings per share:
06-30-2018:  0.04 (estimated)
03-31-2018:  0.08
12-31-2017:  0.08
09-30-2017:  0.14

The dividend per share is currently 0.10, which is a dividend yield of 3.50%. Also, the payout ratio is 27.78%, therefore the dividend is safe according to our calculations.

Base on our calculations, the intrinsic value per share is 5.14, which means it is possibly undervalued and has a margin of safety of 44.31%

Indicators to Watch:

Based on the latest filings, there is 4.80% of insider ownership and 97.10% of institutional ownership. Short-interest is 29,181,153, which is 5.23% of shares outstanding. The short-interest ratio or days-to-cover ratio is 3.68. This stock has a moderate level of short interest, but may still be a buying opportunity depending on other indicators.

The current calculated beta is 2.61

SeekingAlpha:  Office Depot Inc. 2018 Q2 - Results - Earnings Call Slides

Fundamental Indicators:

Based on last reported financials, the company's return on equity is 5.16%, return on assets is 1.79%, profit margin is 1.02%, price-to-sales is 0.18 and price-to-book is 0.65.

Company Scores:

All scores are out of six:
 6  :Valuation Score
 1  :Past Performance Score
 4  :Financial Strength Score
 3  :Future Growth Score
 3  :Dividend Score
 3  :Overall Score

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John Jones
Worked for several Wall Street firms: Salomon Smith Barney, UBS, and Charles Schwab. Has developed skills and gained extensive experience over the years that is used today to uncover winning penny stocks. Also was an attorney for small businesses in Scottsdale, Arizona. That experience and understanding of law provides a unique perspective and edge in discovering quality companies in various industries.

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