August 2, 2011
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of OfficeMax (NYSE: OMX ) jumped as much as 22% today as investors breathed a sigh of relief that the company wasn't headed for a cliff.
So what: It isn't like the quarter was a blowout, but with expectations already in the circular file, OfficeMax easily surpassed what investors were expecting. Sales were down slightly, to $1.65 billion, and adjusted earnings per share of $0.07 were a nice profit when Wall Street was just hoping the company could break even.
Now what: Suppliers of office products have been hit by increased competition and weaker demand in recent years, so a leveling of results instead of a decline is actually worth cheering today. OfficeMax, Staples (Nasdaq: SPLS ) , and particularly Office Depot (NYSE: ODP ) have been trudging through the past few years looking for a bottom, and today investors are hoping they've found it. I'm not excited enough about a $0.07-per-share profit to buy shares today, but it could be a good long-term sign for the economy.
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