Office Depot Stock Gains 177% in Three Weeks and There's More to Come!
A few weeks ago I had my eyes on Office Depot, Inc. (ODP) priced at nearly $0.70. On April 16th, 2009 the price is $1.94. That's a 177% RETURN!
Take a look at the stock chart from early March to mid-April:
The great thing about this stock is that it still has a lot of
upside potential left, even in the short-term because it has been
knocked down so far.
The reason why Office Depot's stock was (and still is) so cheap is
because they took a huge write-down on impaired assets four Q4
2008. I would bet that they decided to take these write-downs in
the midst of all of the financial company write-downs. This way
they look really good when things start to turn around in both the
stock market and the real economy.
The only problem with this stock is that the company and the office
supply industry as a whole has reached a high saturation level, and
it is not expected to grow significantly in the next two
years.
However, this stock is way undervalued for a solid household name
like Office Depot. Compared to its competitors, Staples and Office
Max, it is very undervalued, and has huge price discovery potential
for the future.
The investing advice to take from this stock analysis is that
Office Depot (ODP) can be a great short term play if you expect
earnings to be dismal for the Q1 2009 results that will be reported
on 4/28. It could also be a long-term (2-4yrs) investment; the
stock could potentially go back up to its 52 week high of
$14.40!
How
would you like to have a 640% return on your investment in 2-4
years?
There are very few
investments in the world that exist with this kind of return. As I,
Warren Buffett, and many other investors believe, this market has
presented opportunities of a lifetime.
If you would like to get started trading in your own online
account, try TradeKing or Zecco.com. They are both great services, so give one a
try.
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