NEW YORK (TheStreet) -- Shares of Staples were falling 4.6% to $16.55 following a letter from activist investor Starboard Value urging the company to merge with rival office supply retailer Office Depot . Staples will reportedly reject the investor's call for a merger, according to Financial Times. The retailer is reportedly concerned that the Federal trade Commission will block the merger as it would hurt competition in the office supply retail space. Starboard Value currently owns a 6.1% stake in Staples and a 9.9% stake in rival Office Depot. In its letter to Staples Starboard said "if it becomes clear to us that you have no intention of seriously pursuing this unique and highly attractive opportunity, it would be a clear sign that significant leadership change is needed at Staples.," according to CNBC. Exclusive Report: Jim Cramer's Best Stocks for 2015 STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Staples issued a statement about Starboard's letter saying, ""The company has met and spoken with Starboard Value on several occasions to discuss their ideas. The company made clear that the Staples' board carefully considers all actions that would create shareholder value and is committed to taking actions that are in the best interests of all of the company's shareholders." TheStreet Ratings team rates STAPLES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation: "We rate STAPLES INC (SPLS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins." Highlights from the analysis by TheStreet Ratings Team goes as follows: The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 60.3% when compared to the same quarter one year prior, rising from $135.23 million to $216.79 million. Net operating cash flow has increased to $604.60 million or 14.60% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.44%. SPLS's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.76 is somewhat weak and could be cause for future problems. Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year. You can view the full analysis from the report here: SPLS Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Click to view a price quote on SPLS. Click to research the Specialty Retail industry.
from Latest TSC Headlines http://ift.tt/1Gqr3w8
No comments:
Post a Comment