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Staples, Inc. Message Board

  • jonathan.loewer jonathan.loewer Mar 6, 2014 9:57 AM Flag

    Novice Investors Look at the Price and Think...

    Oh wow!... The stock's down 12% today, here's my chance to buy the company on sale! That's wrong; management missed earnings expectations by 18% (33 cents in earnings vs. 39 expected), and it has lowered guidance expectations from 29c per share down to 17c-22c per share for the next quarter. So expectations for the next quarter have decreased between 24% to an astounding 41% depending on whether or not they achieve the lower or higher end of that guidance. But either way, The stock price is only 12% cheaper while results are down 18% for the last quarter and down 25-40% for the next quarter. So the stock is actually more expensive than yesterday, unfortunately.

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    • Novice investors also just look at the chart and think "it used to be much higher, so it can and should be trading up there again". However, that is not always true; stocks usually fall because wise investors realize the stock was wrongly valued too high in the past.

    • I don't think it makes much sense to compare SPLS now with SPLS in the past, since we don't have the option of investing in SPLS in the past. It's more meaningful to compare SPLS with other current investment options. From that standpoint their latest numbers and prospects don't look too bad. This may not mean much, of course, in a world in which AMZN is given a pass on a PE of 626.

    • All the top brass can do is close stores. Layoff people. Sell-off assets. Slow death by stapling.

    • Is this the same jonathan from the AEO message board? Are you ok, or just bashing to buy a little lower?

      The store closings are good since they will result in $500M/yr in savings. That will push up an already strong cash flow. Why keep under-performing stores open? They are huge stores and just not worth the expenses if they aren't adding to the bottom line.

      I'd like to see Staples offer delivery services to businesses if they don't already. You go to their website, click what you want, and a Staples delivery person shows up in a van from a nearby distribution center, or store. Same day! That would be the ultimate "Easy Button".

      I'm in at $11.30 with the dividend almost 4.25%

      • 1 Reply to hottie362534
      • Hey Hottie! Yep, it's me! How've you been? You asked if I was bashing to buy a little lower... Actually, I was just telling the truth; The stock opened at just above $12 and was trending downward non-stop. I warned people that it was too early to try to catch that falling knife and that it had further to fall. I am still bearish long-term (Office Max's and Office Depot's merger along with Staples closing many locations is more of a band-aid than a solution). I love companies with big dividends but fear this dividend will be on the chopping block if they report a few more quarters like this one. Also, like I mentioned in my original post on this string, I do not like to invest in companies that miss the entire ride of a bull market; The S&P 500 has roared over the last year, and SPLS has done nothing. However, in the short-term, I think your purchase at $11.30 will make you some nice money as a trade. Good luck to you once again, I hope you make nice $$$$ on this, and I look forward to talking to you again soon, Hottie!

    • It's neither a long-term buy nor safe as a short-term-dead-cat bounce right now.

      • 1 Reply to jonathan.loewer
      • Weather had to impact next quarters forecast based on their location in northeast. Probably still eps of about $1 for operations next year (without extraordinary restructuring charges). Still a covered dividend with a growing online, copy/print, postal business. Not great physical retail store structure but even Amazon/Walmart have to have physical locations to fulfill online business and meet customer needs. Consider this stock a hold at 10-11 valuation if dividend holds; there might be better businesses than this but I do not see much risk at present levels. Further removal of competitors, large investor interest, etc should balance out some of the transition concerns.... At 10 valuation I am a hold through 2015.

7.49-0.04(-0.53%)Oct 26 4:00 PMEDT