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Office Depot, Inc. Message Board

  • scottb_43235 scottb_43235 Apr 30, 1999 10:11 PM Flag

    Good day...more to come

    ODP had a good day and I don't see the end in
    site. Here's why:

    1. P/E is about half of what
    SPLS is, which trades between 30-35.
    2. ODP has
    MUCH stronger internet sales with momentum behind
    them.This is VERY significant because there is really as
    yet no dominant net retailer of office supplies and
    ODP has a very efficient distribution mechanism--more
    efficient than SPLS. This makes it an internet play too,
    without the speculation because they are PROFITABLE...if
    they traded at 500 times earnings like some of the NET
    stocks, the price would be out of sight, yet they do have
    the potential to dominate the category on the
    internet, and there's really little or nothing on the
    horizon to beat them there.
    3. ODP's cost of sales is
    lower and could trade at 40 before it would equal SPLS'
    P/E.
    4. Favorable ratings.
    5. Favorable
    technicals.
    6. Good earnings, above street expectations.
    7.
    Aggressive expansion which drives up profitability because
    newer stores do better. Competitors not on this
    level.
    8. Very strong contract/commercial AND catalog
    divisions.
    9. FIRST store in MANHATTAN opens Monday. Brokers
    have the opportunity to see this place firsthand for
    the first time.
    10. Option trades are heavy
    calls--very bullish and no put volume.
    11. Increase on a
    down day for the market with heavy volume pushing it
    higher.

    I screwed up and dumped this stock at 20 1/4.
    Bought back in today at 22. I think it will be above 23
    tomorrow and should toy with 27 by the end of the week. I
    also think that SPLS will continue to fluctuate around
    30-33. However, I would look for ODP to pass it within
    two weeks.

    What do you think? Did I miss
    anything?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • GO 4 IT!

    • SPLS has a much better PR machine. ODP may never
      get over the opinion developed during the ODP/SPLS
      merger that SPLS management was superior and ODP
      management was inferior. ODP is due for a bounce after the
      post split consolidation. Many things should have
      moved this stock considerably like the 768% increase in
      internet sales, this is a stock that won't make you rich,
      but over time will make you a good return. Long 1,500
      shares.

      • 1 Reply to slotcar58
      • The opening in Manhattan Monday should help the
        PR.

        The Viking merger brought a damn good management team
        on board, including Bruce Nelson. This team has a
        history of controlling costs and you can see it in just
        last quarter's numbers: ODP was outsold by SPLS by
        about 500 million and still put 50 million more on the
        bottom line. That's good management...knowing how to
        control costs.

        I think the slingshot effect is
        happening right now. Plenty of support at 22...as evidenced
        by afterhours trades at that level. The stock dipped
        after the favorable recommendations which is typical,
        only to rebound with a sharp spike upward as more
        people realize what opportunity there is. That is what
        we are seeing now. I'll be keeping my fingers
        crossed and I've got my money where my mouth is...

    • Good PR move to hand out 10,000 STAPLES removers in our new Manhattan store than opened today. Hidden meaning I assume. gp

    • sonds like great PR! also the $2,500 donation
      didn't hurt either....

      looks to me like the share
      price closed just barely north of the 50 day moving
      average....I think BARELY counts!

      momentum and OBV have
      picked up very nicely, but I'm supprised that
      accumulation hasn't picked up as well.....don't get me wrong,
      it is rising SOME but not nearly as sharply as
      volume and momentum would suggest....the thought that
      comes to mind is that many of the "trend chasers" are
      not in yet as the trend hasn't yet been
      confirmed.....

      the cross over's still haven't crossed, the 20 day
      moving average has flattened, the 13 is still heading
      downward, but the 9 day has risen SHARPLY.....of course the
      shorter average is usually a shorter term indicator and
      subject to more "false signals", but given all the other
      good indications, and especially the close above the
      50 day average, it looks encouraging that the trend
      is developing.....I'd still like to see the 20 day
      average turn upward, but I think that is
      comming

      (really, I like to see the 20 day cross the 50 day
      average....I think clearstation uses the 13 & 50 day, but I
      like the more conservative 20/50....it takes a little
      longer to call a trend, but usually fewer false
      signals)

      stochastics, again, look pretty toppy.....but where I've been
      calling for pullbacks on high stochastics, another TA guy
      tells me that stochastics can be a weak indicator if
      many of the others are strong....for that matter, any
      ONE indicator can be a weak indication if it is the
      only one that is weak....

      but it looks like the
      indicatators I follow are moving in the upward direction, even
      tho some are still(technically) negative.... (if that
      makes any sense)

      as for the general
      market....all I can say is WOW! I guess Ralph Accampora was
      right back when he was saying dow 11,500 but I was
      still saying dow 10,500 would be tops.....must be more
      liquidity than I ever thought!.....Ralph, you da man!
      (again, as if he ever read anything I ever
      typed)......really wish now that I had held on to those AXP
      options!!!

      anyhow, good luck!

    • looks like things are going well with ODP!
      Unfortunately, I haven't jumped back onboard yet....sounds like
      the thought on the board is that ODP is getting ready
      to soar....is that your opinion? Looks like I missed
      my opportunity in the $19 range, just didn't have
      the cash at the time...ya know?

      Go ODP!

    • It's not too late to get in. ALOT of people were
      buying where those who were wed to the moving average
      were selling...this would tend to show support
      building at this level. Read some of my erlier posts for
      reasons why the stock has not topped.

      Good luck!

    • Have you checked ODP service levels in the Charleston area ? I hear they don't perform too well ?

    • yeah, I know!.....equity rich and cash
      poor.....not a bad long term stragegy, but can cause some
      short term pain......

      maybe the bottom is past,
      but I still don't think ODP has confirmed an uptrend
      yet.....once the trend is established, I think the technical
      guys will pile in, then soon after the momentum guys
      will jump on board.....

      so, to answer your
      question, yes....I think ODP is going up from here.....

    • perhaps you were correct when you said it would only be a small run to 40 after the split!......

      very prophetic!

    • Last time I checked, it was a long way from 23 to
      40 :-)

      And if I remember correctly, ODP was
      around 24 after the split? -- in reality, it hasn't
      hasn't gone up at all. I will start to feel lots and
      lots and lots better when ODP cracks
      27.

      However, I do think the the positive effects of the Viking
      merger are starting to add to the momentum. If ODP is
      ever realized as a value then it should be taken to at
      least the same level.

      Profitz seems to be right
      most of the time, at least, I like to read his
      posts.

      Let's hope this dog hunts before to long.

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ODP
3.65+0.04(+1.11%)Aug 26 4:00 PMEDT