The Anti Dunder Mifflin

Written by GSCR Staff   
Wednesday, 04 December 2013 12:17

 

We hope everyone enjoyed the long weekend and the Thanksgiving holiday. While the time between Thanksgiving and New Year’s is generally very slow in the industry, there are still deals to be had.

 

Anyone familiar with today’s headline knows we are referring to the now syndicated TV show The Office, starring Steve Carell. Part of the humor related to the show is that the firm is a paper manufacturer, somewhat of a fading industry with the advent of e-commerce.

 

Along that mindset, today’s highlight is a household name that has survived a downturn and looks like a mover. The Office Depot, Inc. (NYSE – ODP - $5.45) is a well diversified retail and wholesale supplier of office products and services.

 

ODP passes our 3-tier checklist with flying colors. The technical analysis indicates a very bullish signal related to the Daily Moving Average all the way out to 50 days. The stock has been on a huge momentum run over 25% trading on nearly 10 million shares traded per day over the last three months. Finally, the forward P/E of 21 is less than half the trailing 12 month P/E with a 10% growth in top line forecast for 2014.

 

The Office Depot continues to innovate related to growing new market segments and customer needs. One key data point that came out of Black Friday was that the trend of online shopping from mobile apps is in a hyper-growth mode stage. According to data from IBM (NYSE – IBM) sales from mobile devices increased by 43% year over year on Black Friday in 2013 and accounted for over 21% of all online sales. The Office Depot has developed a high-end mobile app geared toward repeat customers and on time order fulfillment. Additionally, the merger with OfficeMax was completed earlier last month. The newly formed Company will be the second largest office supply firm offering higher-end services than the largest firm Staples, Inc. (NASDAQ – SPLS) and sharper focus than bargain all under one roof stores than Wal-Mart (NYSE – WMT).

 

We like ODP as a strong seasonal play on the New Year, as companies re-stock supplies for 2014. Look for a 10% pop over the next month or two.

 

Have a great day!

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

Disclaimer:

This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports. 

Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.

It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations. 

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.

ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS   INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com

 

Add comment
  • No comments found