Buying Office Depot

I bought stock in Office Depot (ODP/NYSE) today at $15.00 per share. The stock ended the day at $14.44.

I'm swamped with non-blogging duties right now, and will post my rationale for buying when I get a chance to come up for air. Until then, I wanted to inform regular readers of this transaction. Thanks for your patience.

Comments

[Jeff]

Another lousy retail pick. First FL, now ODP. In retail, picking companies with lowering sales and earnings expectations is the opposite of what you should be doing. See excerpt from Barron's:
Office Depot Inc., the world's second-largest office- supplies chain, forecast ``continued erosion'' of sales and earnings in the fourth quarter because of declining demand from corporate customers. Sales at Office Depot and Staples Inc. have slowed as small businesses and consumers buy fewer copiers and furniture during the worst housing slump in at least 16 years.

[Ron Paulitan]

I don't like this either. I love your Whirlpool idea. I disagree on FL either.

[Neal]

With all of the recent buys and add tos do you have any cash left?
The position will change as you portfolio does, but what is a full position as percentage of your portfolio?

[Alex]

Interesting idea.
I haven't finished my due diligence yet, but the ODP supply order form is a virtual staple at any corporate office; ODP has steadily improved sales; and it has controlled SGA fairly well. And any services oriented economy will have a place for an Office Depot.

While sales will likely lag in the near term, they can use the opportunity to pay down their long-term debt.

[John]

Jeff and Ron: The stock is down bigtime over the past year because of , in part, the worst housing slump in 16 years. I'm thinking it won't go much lower before turning back up. But I could be wrong.

Neal: I have some cash left. I did a fair amount of selling partial and full positions before my recent buying. Each position, when bought, is between 4% and 5% of the portfolio.

[armin sternberg]

I think this is an interesting selection. besides long leaf there is a canadian investor who likes the office supply segment. his name is abramson of trapeze capital. I love your blog even though I havent purchases any of your investments as yet. recently I have loaded up and am underwater on CCRT, which is now trading at less than 60% of book. The stock is held by several value guys at much higher prices including trapeze capital. they purchase distressed credit card portfolios and the like. I just keep scratching my head at how cheap this one is and buying more.