Which Office Supply Retailer Stocks have the Strongest Earnings Trends?

Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

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Here’s your Cheat Sheet to how the top 3 office supply retailer stocks rank via earnings trends:

Office Depot, Inc. (NYSE:ODP): Current Price $5.23

Fiscal Year 2007 2008 2009 2010 2011
Revenue ($) in millions 15,530 14,500 12,140 11,630 11,490
Diluted EPS ($) 1.43 -5.42 -2.003 -0.2294 0.1681

Sales have fallen every year over the period under review and profits, too, were down with the exception of the somewhat better year in 2011.

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Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Sep. 30, 2011 Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012
Revenue ($) in millions 2,837 2,970 2,873 2,507 2,693
Diluted EPS ($) 0.28 0.0232 0.14 -0.1779 -0.1916

However, we see that EPS in the June and September 2012 quarters is deep in the red. Office Depot is no longer in the reckoning…