Staples (SPLS-Q)

Same-store sales are falling. Office supplies brick/mortar are just killing them right now, and they don’t have a great e-commerce presence. It will hang in, because it is only one of 2 out there, but it will struggle.

He would rather own advertising companies in the consumer discretionary sector. You get a better dividend and a smoother ride.

(Market Call Minute) It is one of the underperforming retailers. Prefers CSCO-Q.

If this company does eventually buy Office Depot (ODP-Q), that is a positive because they are consolidating a very competitive industry. There is a lot of competition from online retailers. Not an industry where she sees a lot of strong secular growth and it is relatively mature. Not a space that she is particularly interested in.

In the midst of a structural shift in the retail sector and you may want to avoid this. With stores closing, they are in a shrinking space.

Was on his Stock Watch list, and then had a run and was taken off the list. He isn’t watching this one that closely. Good online growth, but the stores themselves have been having some troubles. A lot of the companies in this sector are downsizing. If this got under $10, he would be more interested. A leader in its field, and he loves investing in the leaders as contrarian plays.

Growth rate has really declined to low single digits. Stock is expensive. Would not own this stock.

Market leader in office supplies. Problem is that the whole world has changed for them. More and more businesses order on line and company is stuck with big leases.

Facing stronger competition now compared to the 1990s when they were building out lots of stores in a consolidated industry. Some of the office supply consumption, such as paper, is going down. A lot more competition from big box stores. They are obviously going into and entrenchment period where they will try to cut costs. In the short term, this is a Hold more than anything else. If they are able to stabilize the situation and cut their costs, there is definitely value in the stock for patient investors.

Unfortunately is in a business that is declining from a retail point of view. Companies don’t use as much of their products as in the past. More and more orders are placed on-line so the stores are just costing them more and more to operate.

Had terrible earnings and the stock dropped 15% or so. Announced they are closing a bunch of stores and are increasingly trying to sell things on line. The problem with going head to head with Amazon (AMZN-Q) online is that Amazon seems to have an unlimited ability to sell things at a loss. This company is not going out of business. They made a lot of money, just not as much as people wanted them to. He owns, but thinks his time as an owner is coming to a close. When companies have bad earnings, there is frequently an emotion in the market to have a big selloff, but if you look 6 weeks later, infrequently half of that loss is recaptured.

The leader in office products. Likes their ability to do “fulfillment the next day” on every product that you want. Sees a continuance to improve revenues. The problem is, revenues have flat lined so they are looking to improve it by cost cutting. Likes 1) their high free cash flow yield, 2) increasing dividend each and every year and 3) always a potential as a takeover target from private equity. $25 in a few years.

Just under 10% yield. Fundamentals are challenging. It is a very competitive market. Expects them to shrink over the net several years.

Phenomenal valuation, great balance sheet. But it comes short on management. Likes them to have a sense of urgency. They are not concerned about the lower amount of paper usage. Ignoring that trend is a red flag. They made a lot of acquisitions in Europe over the last 5 years and she is not convinced they can do what is necessary. Short term the consolidation of the number 2 and 3 players will be a bit of a benefit to them.

Has been lumped in with all the other retailers, he thinks, unfairly. It is their European stores. Great company and too cheap and they are buying back shares hand over fist. Could be taken over by private equity.