ODP Office stock Story

ODP -  USA Stock  

USD 44.93  2.56  5.39%

It appears that Office Depot will continue to recover much faster as its share price surged up 16.85% today. Office Depot's current daily volatility is 3.02 percent, with a beta of 0.6 and an alpha of 0.06 over DOW. As many millenniums are trying to avoid aggressive defence, it makes sense to recap Office Depot a little further and try to understand its current market patterns. We will look into some reasons why it is still possible for Office Depot to maintain above-average margins while minimizing volatility.
Published over six months ago
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Will the recent Office Depot volatility roll up frighten insiders?
Office Depot has roughly 762 M in cash with 544 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 14.47. The entity has 1.77 B in debt with debt to equity (D/E) ratio of 1.03, which is OK given its current industry classification. The firm has a current ratio of 1.16, demonstrating that it may not be capable to disburse its financial commitments when the payables are due.
Investing in Office Depot, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Office Depot along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Office Depot's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Office Depot in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Office Depot. Your research has to be compared to or analyzed against Office Depot's peers to derive any actionable benefits. When done correctly, Office Depot's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Office Depot.

How important is Office Depot's Liquidity

Office Depot financial leverage refers to using borrowed capital as a funding source to finance Office Depot ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Office Depot financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Office Depot's total debt and its cash.

How ODP Office utilizes its cash?

To perform a cash flow analysis of Office Depot, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Office Depot is receiving and how much cash it distributes out in a given period. The Office Depot cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Office Depot Net Cash Flow from Operations is very stable at the moment as compared to the past year. Office Depot reported last year Net Cash Flow from Operations of 467 Million

Office Depot Correlation with Peers

Investors in ODP Office can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Office Depot. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Office Depot and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities ODP Office is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage.
Please check volatility of ODP Office for more details

Is Office Depot valued appropriately by the market?

Office Depot appears to be not too volatile, given 1 month investment horizon. Office Depot maintains Sharpe Ratio (i.e. Efficiency) of 0.0674, which implies the firm had 0.0674% of return per unit of risk over the last month. Our standpoint towards forecasting the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for Office Depot, which you can use to evaluate future volatility of the company. Please employ Office Depot Coefficient Of Variation of 3757.86, risk adjusted performance of 0.0384, and Semi Deviation of 3.86 to confirm if our risk estimates are consistent with your expectations.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Our perspective of the recent Office Depot roll up

Expected Short fall just dropped to -2.88, may hint at upcoming price depreciation. Office Depot shows above-average downside volatility for the selected time horizon. We advise investors to inspect Office Depot further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Office Depot future alpha.

Our Conclusion on Office Depot

Although some firms within the specialty retail industry are still a little expensive, even after the recent corrections, Office Depot may offer a potential longer-term growth to insiders. While some in few weeks oriented insiders may not share our view, we believe it may not be a good time to buy new shares of Office.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Office Depot. Please refer to our Terms of Use for any information regarding our disclosure principles.

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