The stock price is now 37.3% below where it was
at the start of the year and 25% below where I
bought it just a month ago. Is there any reason for this
stock to be punished this way? All I know of is false
rumors and one man's opinion at DLJ. Do they really
carry that much weight?
OMX and SPLS have slowly
started moving up, but ODP continues to slip.
anyone has any reasons that can be discussed here,
please bring them forth.
It makes no sense. Really. None at all. "It is
not logical". As I said before, that's the bad news.
The good news is that there is absolutely no known
viable reason that ODP won't head on back up. Question
is, when? Answer is, who knows? ........... Because
........ it ........ makes ........... no ........ sense.
I have traded this stock many times in the past
year. I thought I had the deal of deals to get in at 17
7/8. Fed policy does worry me, but seriously how low
can it go. SPLS is 50 P/E. We are 24. If we hold we
will get our money back.
Happy Friday all.
Thanks for your reply.I believe what you say is
probably the cause for the decline. Perception is stronger
than reality it seems. But that's wallstreet.ODP is
still a very large co. in Europe,and there seems to be
a big demand for this tpe of product
internationally. Time will tell. Thanks again for your
This weeks action:
OUT @ 16 1/4
SFP IN @ 23 7/8
SFP @ 26
ODP @ 15 3/8
That's why you cut your losses
and get into something you feel more comfortable
with, make money while you would have kept losing. You
can then make the decision to get back into your
losing stock at a lower price. Even if ODP went up, it
would have been a stretch.
Watch WMT @ 40 1/4.
Use your own judgement. I'll check back mid next
week. Hey, you win some, you lose some.
VKNG is still the major mail order force in
Europe (associates in the UK tell me that SPLS's Quill
launch over there was pretty uninspiring in terms of
customer service) and ODP is still strong internationally.
Whilst it would have perhaps been encouraging to see ODP
take a position in Germany and leverage VKNG's
dominance there, SPLS and ODP still do not compete at a
retail level in any of these 3 markets (Germany, Holland
It's a big (bad) world and if
ODP continues to steer clear of SPLS (on a pure
retail level) internationally, the short term effect to
ODP is negligible. The way I see it at the moment,
SPLS has established a great base in Europe... but
their UK experiences have been costly and Germany has
been challenging. It's worth remembering that over
there the retail landscape is very different to the
USA, and even more different to Germany. I would be
interested to see what the analysts (DLJ excepted) make of
the news given that office superstores + Europe
haven't yet equalled profit. And also given that these
stores have been sold once already in the last year (by
Metro to a Deutsche Bank led group of investors). Hot
potato or good business by the Germans?
however, one must question how long ODP can ignore
Europe's 2 largest office supplies markets (Germany and
UK) from a retail perspective. If I were Mr Fuente, I
would be going all out to acquire a similar
competition-free established international presence. The Coles
Myer owned Officeworks chain in Australia springs to
mind. Market dominant, well-established, similar
culture and language, and another VKNG
But what do I know - almost every stock I own has
Good luck to all - could be a
Analyze two football teams and pick a winner.
Analyze two stocks and pick a winner.
SanFrancisco vs. Greenbay 98-99 playoff game, I had friendly
20 dollar wager with a buddy. Greenbay was thrashing
the 49'rs all day. It didn't look good. Fourth
quarter, 3 minutes remaining, Jerry Rice fumbles! The refs
don't see it. First down! Seconds remaining, 49'rs
throw a pass towards the end zone. The receiver who
dropped several passes earlier in the day reaches between
two defenders to catch the ball. Game over!. A burst
of adrenaline is released. It was also worth 20
Thursday night. WMT closed 41 7/16 and opened 40 7/8
friday morning. Early morning trading rose the stock
quickly to 42. Buy? Quickly went back down to 41 1/16.
Buy? At noon back up to 41 3/8. Buy? Like the San
Francisco 49'rs, it gets hammered the rest of the day.
Friday 3:30 pm, WMT was at 40 1/4. 30 minutes before
closing. Never a good time to buy. More times than not
when a stock is going down it's better to wait until
the final 5 minutes before close. Against all logic,
I pulled the trigger at 40 1/4, WMT closes at 41
1/4. An adrenaline rush. I also made $$$ dollars.
(verify time stamp on previous message against one
It was all very lucky. Both shouldn't have happened.
Both did happen. It's legalized gambling folks. That's
all there is to it. It's probably safer to bet on the
Trading stock is not P/E vs. P/E,
good earnings, good management or charts and graphs.
To win, you have to pool money together to beat the
street. How do you pool? You don't. You guess that the
general public will bet the same as you. People you can't
see. People you never spoke to or wrote to. People who
don't know your name, they don't know your handle. They
don't even know how to use a computer. Yes, all this
guessing to Beat the Street.
Without the Street,
your stock goes no where. To get the Street, you must
realize the Street is behind the scene, some scheme, some
news or that damn Greenspan.
finally here it as: upgrade. Worse yet, downgrade. Either
way, a day or two late. This is the Street's way of
saying we want you to team with us to move this stock in
the direction we want it to go. After all, we are
behind the scene, some scheme, making news and the hell
None of that in football. The
results are not directly tied to greed. Your not betting
against something you can't see. It's all out in the
open. The results are instantaneous. It's you against
some post mafia booky in VEGAS. Can you beat him? Or,
can you Beat the Street? Choose your pill.
yes, I think a significant change in volume can
be a sign of a turning point......like when selling
"dries up" or the opposite when "buyers leave the
but, I don't like to depend on any one
indicator.....it's best to have several confirming
in addition to the technicals that Dan already has
posted, I notice the 20/50 day moving averages haven't
yet crossed bearish yet on the Dow or S&P, but still
look like they will do so soon.....
again, look horrible.....stochastics on transports look
like they are bottomed out, as do some other
indicies....I suspect a rally tomorrow or maybe next 2
days....beware of the "sucker's rally".......
that has me a little "perplexed" is that the dow still
hasn't really broken it's "slightly ascending
add that to Joe Kernan's comment today that when it
sounds unanimous that there is more downside to go, that
makes him think we've bottomed.....hmmmm.....
see his logic.....when ALL the experts say there's
more downside, it usually is a signal of a
but I also see Friday the 13th comming soon....not
that I'm so superstitious, but sometimes I think "Mr.
I remain cautious.....
then, that's just me......
good luck to all
Whether they technically use "free cash" or debt
for a stock buyback wouldn't matter. If they use
"free cash", they would have less "free cash" to open
more stores that would indirectly case debt to go up.
It is basically a cost of capital concept. Companies
pick how they want to use.
Buying back stock to
me means one of three things:
1. The industry
is getting saturated, so there is not a better thing
to do with the capital.
2. They are building
as fast as they can, but still have left over
3. They are trying find a way to increase share
The hope for shareholders would be reason #2. At
current EPS, a stock buyback would slightly increase
earnings. Based on the projected 1999 earnings of .99 a
share, the cost of capital would have to be 10.09%
Looking at their balance sheet would suggest that
currently in a net borrowing situation. Their cash,
equivalents, and short-term investments have increased from
$714,954,000 in December to $729,983,000 in June. Their
long-term debt has increased from $35,490,000 to
The cost of capital is greater on debt that you can
make on short-term investments and is much greater
than cash and cash equivalents so why would you hold
all the cash? Here is why. Adding cash, short-term
investments and accounts receivable you come up with a number
of 1,472,676,000. Their current liabilities are
1,491,645,000. This gives you an acid test ratio of .99. The
large cash number is basically to support current
What does my analysis tell you? The only way for them
to buyback stock is to borrow money or decrease
store openings. They are currently borrowing money to
open new stores and would have to borrow more to buy
nah, I haven't been quiet, just that there's been
a lot more posts than usual here......makes it look
like a long time between posts.......
tea leaves, they don't look so good right
I'm ready to go out on a limb and call for another
leg down in the general market.....dow bounced off
it's intermediate base line again, but remember it
broke it the other day.....transports definately broke
ODP TA still looks bad....(and
that pretty much sums that up)....
that Friday 13th is comming! (glad it ain't triple
witching day on top of
starting to wonder if I should have sold at 18ish
(!)......(not really, I'm still holding to my
so to sum up tonights "voodoo economic report", the
tea leaves forcast "bad stuff" and this is confirmed
by my wee-gee.......
I'm hunkering down for a
rough ride that I don't expect to get better till the
open market committee meeting later this
Comparing ODP to OMX and SPLS shows ODP does have
a lot more cash setting around.
Equivalents, S/T Investments, and a/r:
ODP is in much better shape than OMX and SPLS. I can
give some good reasons. VKNG is a cash cow. ODP's lack
of new stores during the failed merger. ODP is the
only one w/o a stock buyback. ODP's much better sales
at its stores than the competition. The question is
what best to do with the extra cash?
admit to being wrong.)