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.
>>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.
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???