Summary Points: The stock tanked after the deal with Staples collapsed. Management has been taking steps that could positively influence the stock. Stock has found a base while its cheap price (under 3x EV/EBITDA) implies that any positive news will help it recover. Where there is fear, there is opportunity. Office Depot (NYSE:ODP) presents such a case. Value trap … [Read more...]
Archives for November 2016
ArcBest: A Lack Of Reasons To Like
Summary Points ARCB trades at a discount to competitors; however, relative growth has been average and EBITDA margins are relatively lower. Majority of business is asset-intensive with high capex requirements and limited control over revenues and expenses. Investors should consider off-balance sheet items, pension obligations and make adjustments for equipment … [Read more...]
Abercrombie: Selling Below Tangible Book With A 5.5% Yield
Summary Points: The company appeared back on track as it closed Q4. Two quarters later, this is in question. Hollister brand has done most of the work while Abercrombie brand is still struggling. Industry-wide decline in same store sales. The problem is not unique to ANF. Comparable sales highly fluctuate. The stock trades below tangible book with a 5.5% dividend … [Read more...]
DeVry’s Poor Enrollment Makes It A Hard Stock To Like
Summary Points: DeVry came out with an earnings beat with revenue growth and better operating margin. Company has spent hundreds of millions on acquisitions that helped revenue growth. Medical and Healthcare is the most important part of the business but within the segment not all parts are doing well. Enrollments are the key driver and these, in general, remain … [Read more...]
GameStop: 70% Discount, Sustainable 6% Yield And Solid Management Plan
Summary Points: Bears are overly pessimistic while the stock price does not reflect any of the positive evidence from management moves. Management plan is reasonable with plenty of cushion available. Company on track to keep GameStop in business for many years to come. Stock trades at 70% discount to market (lower than 2012 $16 low) with a sustainable 6% dividend … [Read more...]
