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Office Depot, Inc. Message Board

  • cwpete2 cwpete2 Sep 26, 2007 9:37 AM Flag

    My take on the ratings shuffle:

    Funny wickedbird,

    I also own JPM as I think JPM as been oversold too hard too aggressively recently. Who'd a thought? An upgrade for ODP & a downgrade for Staples?

    "J.P. Morgan analyst Stephen C. Chick upgraded Office Depot Inc. to "Overweight" from "Neutral." Office Depot's shares have lost half their value this year and trade near the same price as when Chief Executive Steve Odland took the helm in March 2005 and he sees room for the shares to rise."

    I agree that ODP is oversold hence my call position was opened nearly two weeks ago. But I am a bit surprised regarding the downgrade for SPLS:

    " underweight from neutral, saying 2007 earnings-per-share guidance looks too aggressive, particularly given the recent weakness in the retail environment."

    I actually like going longs stocks which are "aggressive" with their guidance. That shows management is really pulling for you as a share holder. I would be rather upset if I owned SPLS long after this, but I don't..

    Going forward ODP is now at overweight, & SPLS now at underweight. Like I said, Who'd a thought? You can bet now that we can see some money rotate out of SPLS and possibly to ODP.



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    • That is just basic wall street valuation. Like I have mentioned before, the converging of valuation is happening now. Wall Street doesn't buy and hold, they buy, hold, and trade. You see a lot of example such as NDAQ and NYX. Buy and hold will often need to go through a period of consolidation.

      SPLS might be a good company, but it takes a superior company to outperform its peers. Basically, SPLS is a good company, ODP is a good company with poor management and store policies. In the long haul. We will always have two top players in the office supply business. OMX is the one that is going down the toilet. (worst management, worst stores, and worst store policies.) btw, can we hear some screams from those wonderful shorts at 18 something?

      • 1 Reply to jlinventure
      • Among the three I agree with you that ODP and SPLS will survive. Where I disagree is that they are both good. SPLS is Great while ODP is OK. Staples beats Depot on the contract side every day and will continue to do so. Staples does a better job at retail as well - not great but a little better.
        So where we disagree is that I think Staples is a superior company to Depot and does outperform Depot every day.
        Just my opinion - by the way I do not work for Staples and never have. I am in the OP industry and know both players well.

    • ODP is very possibly oversold but for good reason in my opinion.
      J.P. Morgan analyst Mr. Stephen C. Chick is wrong in my opinion. SPLS is a MUCH better company than ODP. I have owned a few hundred shares of SPLS for years. I would not take any major positions in any of the OP stocks at this time - but if someone put a gun to my head and said pick one for the long term it would certainly be SPLS over ODP.

      • 1 Reply to staplers101
      • I'd have to agree, Staples is in much better shape than Depot and is clearly the leader in the industry. As we've seen with other companies in this industry, you never know who's in bed with who when it comes to Wall Street and the analysts with regards to inflating (or driving down) the value of the stocks. Plus most of it is based of short term expectations and quarter to quarter numbers.

        There are so many greased palms you could convert the auto industry from their reliance on oil tomorrow! Bunch of crooked bastards.

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