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Staples, Inc. Message Board

  • zebraspit zebraspit Oct 13, 1998 12:56 PM Flag

    Office Depot=good long, SPLS=good short

    The relative valuations of these two companies
    make NO sense.

    My guess is SPLS comes down.
    Over 30% of their sales are in business machines, and
    that area is going to be hit in a bad economy.


    ODP sells at about 13 times '99 earnings estimates of
    $1.50.
    SPLS sells at about 29 times '99 earnings estimates of
    $ .99!

    (What, if anything, am I missing
    here?)

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • You appear to be missing a Billion dollar piece
      of the pie.
      The SCC doesnt sell computers. In
      fact our stores rely very little on computers sales
      and will not be hurt much in the drop of business
      machine sales. At the SCC, We sell the corporate world
      the paper, envelopes and toners that keep the top
      companies running.
      Staples is the kind of stock that
      will always hold it value in a slow down, smart
      buy.
      P.S: the valuations make no sense is a correct
      statement for half the companies on the nasdaq.

      • 1 Reply to tug32
      • >>P.S: the valuations make no sense is a
        correct
        statement for half the companies on the nasdaq.
        <<

        In a shaky market, that's not much of an argument
        for thinking the SPLS is "a smart buy", is
        it?
        And, the fact the ODP is selling at a much lower
        valuation means the SPLS is very vulnerable -- overdue, in
        fact.

        (Or do you think ODP is way undervalued?)

    • I agree that if we are hit with a bad economy,
      business machine sales will drop. However, did you know
      that the mark-up on computers is a measley 8% or so.
      This 8% doesn't even factor in the cost of doing
      business so the actuall pure profit is even lower. My
      point is, even though high business machine sales makes
      the overall sales numbers look good, they have almost
      no impact on the profitability of Staples! Of course
      this probably won't matter to the big investors who
      will see overall sales dip a little and start pulling
      there $$ out.

      Do you know what Staples most
      profitable product is?? You got it.....copies!! Maybe we
      should buy Kinko's???

 
SPLS
16.76+0.39(+2.35%)Feb 27 4:00 PMEST

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