I have to agree "snowmageddon" or whatever it was called depressed retail earnings in the Northeast. Staples was disproportionately affected because NE is where it has its largest position. Who is shorting this stock when this quarters earning come out is in for a world of hurt. There are already signs that retail is on the rebound which means a possibly massive short squeeze if Staples, an already profitable but heavily shorted company, can shows even a slight improvement over the previous quarter.
Hey buybackerer, believe what you want to believe. The truth is sometimes a pain to accept. Just remember who the bigger fool is: The fool himself OR the one who follows the fool !!! Good luck with your dreams or is it your nightmare to keep believing.. Don't say you weren't warned.
I am a Mid to long term bull of this stock but I believe that you should give both sides of a story so other Long term bulls buy a stock who won't be easily startled by a little turbulence. I will probably put a limit order on it if it makes a sufficient gain and shows a potential for long term strength and possible growth.
Staples is a retailer, worse a specialty retailer in a dying industry, which means there are alot of factors determining its fate unlike an HP which can just buy into another industry or expand its brand to cover other things like 3D printing. Even low margin Amazon realizes retail on its own is too sensitive and that is why it is trying to branch out with the FireTV and is doing everything it can to increase profit margins. Staples is limited in its reach of what it can actually do without isolating its corporate clients or its suppliers.
Staples will probably dominate the Office supply space in the short term but that is like being the biggest fish in a shrinking pond. Brick and Mortar Retail is not a growing space and specialty retail is the first to die as specialty retailers struggle to find areas to grow into. Even Staples partnership with DDD, while great in the short-term will not be enough to save, especially if it is successful as it will place a target on its back by the like of Walmart, Office Depot, and even Fedex which owns Kinko's.
I would love to see Staples broaden itself out to into an industry to gain a lifeline foothold like growing 3D printing even if it is direct conflict with HP or even its current partner, DDD. Another possible future is for Staples to become its own brand and sell its products at broader retailers like Walmart or Amazon and rely on its business and government contract division for revenue. Either way, I am still bullish on Staples in the mid term, it has a low P/E ratio, little debt, and is doing all the right things to keep itself afloat in the short term. However it is simply struggling to hold water and will probably suffer or be pushed out of the retail space entirely. If Staples does not find a way to adapt and find a way to build a stable moat, it will go the way of Borders, Circuit City, and Radioshack.
This is a turnaround story .Closing stores is a necessary process in returning SPLS to earnings growth . Unprofitable stores hurt earnings and closing them will improve results. There is another benefit to such an announcement . If you want to see people scramble to save their jobs then go to Staples , as employees try to keep their operation profitable .The alternative is to do nothing , which ultimately is not a viable option,and would probably be catastrophic.And SPLS has all the advantages in the industry, namely , it is the most profitable of the big 3 (or is it 2 now ) office supply chains and has the lowest costs and the biggest in terms of market cap.. And yes ,SPLS has debt , about 26% of capitalization is debt . ODP's debt to total capitalization is over 50% .In general , the office supply business is a lousy business , not unlike the PC business, but SPLS is the winner in this struggling industry. But I detect another reason for your post , unrelated to SPLS's future prospects.
OK, biff you are right . As of Feb 2014 SPLS had $5 billion in total debt. $1.6 of that is Longterm Debt , down from $1.7 in 2013 and $2.3 billion in 2012. While SPLS was payingdown debt ,it was also buying back shares . Treasury stock as of Feb 2014 was $5.2 billion ,up from $4.9 in 2013 and $4.4 in 2012. SPLS was also paying the dividend and raised it $.04 last year and every year for the last 5 years . Treasury stock is a negative equity number since it represents the retiring of outstanding shares . But if you give it the value it cost to retire it and add that back into the total equity number you get a better understanding if what the real equity is. As of Feb2014 total equity was $6.1 billion and Treasury stock was $5.2 billion. There's $11.3 billion in equity there. From 2012 to 2014 SPLS has reduced total debt from $6.4 billion to $5 billion. If you look at he cashflow statement , you'll see that SPLS had positive freecashflow every year over the last three years . What did they do with it ? They paid the dividend , bought back shares , and paid down debt . Unless you believe that SPLS's financial statements are a work of great American fiction then you have to believe that consolidation will bring this stock back as earnings per share improve over the next year or two.
The 5th company was Barnes & Nobles. Go check them out. If you want to see why Staples won't be around. Much longer, just go read about the stupid acquisition of Corporate Express several years ago. No company with management with working brain cells pays like Staples did to buy them out. Also check out how Corporate Express has been doing since then. The only people who made out were the stockholders who sold their stocks for more than 2x what their stock was worth. If Staples. Stocks haven't risen after all the store closings, layoffs, firings and payroll cuts and stock buybacks to not have to pay dividends, what will? What do you know that isn't being released to the public? People I keep in contact with just see things getting worse. They have seen great losses in their stock portfolios.
What is just beginning to become obvious is that the store count of a corporation does NOT have to increase every year to be profitable. Home depot just announced it too is closing stores in favor of large mega-warehouses that will ship from online ordering. They are actually copying SPLS's evolving business model which comes from none other than Amazon. SPLS is a fantastic bargain here but the retail folks won't get the message for another few quarters. All one has to do is look at basic value investing! Compare P/E, cash flow etc. Check out the fundamental parameters and judge for yourselves. It's almost a no-brainer with a dividend to boot.
You think so !!! Then how come last year Staples was listed along with 4 other companies as being BANKRUPT IN THE NEXT 5 YEARS. The four other stores predicted are on their way out : JCPenney, Sears, RadioShack & I forgot the other but it is going down too !!! Start paying attention better or you'll be kicking yourself soon after taking a loss on your stock purchases.
Sentiment: Strong Sell
Hell, managers are firing people for no reason. let alone not hitting quota. It all comes down to keeping cheap help and getting rid of anyone making more than minimum wage + only hire PART TIMERS !!! CT is a joke of a state where you don't need a reason to be canned by an employer and Staples takes advantage of that.
Sentiment: Strong Sell
You are keeping Staples on your long term list. Hope you didn't invest too much in stock because you are going to lose your shirt. Trust me when I say "Dump their stock". What is written on paper and what those on the inside know, isn't what they say they are. They keep closing stores, firing people ( especially those who have been with the company awhile), only hire part timers and make any chance of hitting budgets or expectations for bonuses impossible for only 1 reason. TOO NOT HAVE TO PAY THEIR WORKERS MUCH MONEY AT ALL. Part timer's healt insurance is a joke and they can't even afford the insurance because it is so expensive. Plus part timers don't get the same kind of vacation, sick and personal time that full timers did. So get rid of full timers so you don't have to pay good benefits, hire part timers so you can get rid of them quickly, especially before their 90 days if up so you don't have to pay unemployment, and cut payroll so there are no workers in the store. Go into some store and try to find help -- NO ONE TO BE FOUND. I've been there and seen it all. I still get updates from friends who are still there and just see the company dropping like and 500 lb man with a parachute with a hole in it. It isn't falling fast now, but give it more time and that rip is going to open really quick and then see how fast it falls. I would never ever again buy their stock. Had it once and lost and it never recovered enough to be profitable. And like biff_smith1 said " go back and take a better look at their assets and liabilities pages. You'll change your mind.
Sentiment: Strong Sell
Go to the SPLS 10K and check way down to assets and liabilities and you will see that there is debt.
Of course SPLS is on the list , No debt , a cashflow cow and in the process of consolidation of operations makes this a no brainer over a year or two. The dividend is safe since SPLS generates so much cash . So safe they buyback shares on top of paying the dividend. HPQ is next . It's had a great run .It was $20 a year ago. But it has more to run . Like SPLS ,HPQ is a turnaround story , but HPQ and CEO Whitman are further along than SPLS in their turnaround effort . HPQ , also a great cashflow generator, is paying down debt , buying back shares and cutting cost to bring increases in earnings per share to stockholders. EEP , a Master Limited Partnership, is in the middle of an expansion plan that will reward patient Unit(share)holders with a resumption of growing payouts as completed projects continue to come on line BAC is next. BAC is a too big too fail bank that has almost put all it's financial-crash litigation behind it. BAC recently received approval from the Fed to raise the dividend , indicating BACs sustainable financial strength. Last earnings report was encouraging , if litigation expenses are backed into earnings per share . BAC reported $.35 versus $.27 estimate . The last one is ORAN. I know what your thinking , but the old France Telecom seems to be on the mend . If last quarter is any indication , than falling revenue and large write-downs are a thing of the past. This would bode well for ORAN growth on top and bottom lines and ultimately the dividend . Please do your own homework on these ideas, because you know the old saying about free advice .