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 $5.23
|Revenue ($) in millions||15,530||14,500||12,140||11,630||11,490|
|Diluted EPS ($)||1.43||-5.42||-2.003||-0.2294||0.1681|
Sales have fallen every year over the period under review and profits, too, were down with the exception of the somewhat better year in 2011.
Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:
|Quarter||Sep. 30, 2011||Dec. 31, 2011||Mar. 31, 2012||Jun. 30, 2012||Sep. 30, 2012|
|Revenue ($) 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…