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Office Depot, Inc. Message Board

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  • kamins.moore kamins.moore Jan 4, 2013 12:35 PM Flag

    What is causing ODP to Rise?

    I think the more important question is what do you think the company is worth? What is the per share intrinstic value of the business. If you answer that question it can be a guide as to when to buy, sell, average down etc. If you can't answer then you should not buy, and wait for an investment that can be analyzed. My own analysis indicated that the company was worth around 6.00-6.50 a share, based on a asset valuation model. The catalyst I'm counting on to unlock that value is the activest hedge fund, pushing for improvement in operating margins. And the possible sale of the 50% stake in the mexican subsidary. Buying and holding hoping for it to reach the value you paid is not a good idea, you are tying up capital and incuring large opportunity costs, not to mention it may never return to the price you paid. That is why it's important to have a good idea of the business value and buy at least 50% discount to this to obtain a good margin of safety.

    Sentiment: Hold

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