Office Depot: Value Play or Value Trap?

Shares of Office Depot (NASDAQ: ODP  ) are up 8% since activist investment fund Starboard Value LP bought a 13% stake on Monday morning. Starboard CEO Jeffrey Smith believes that shares are "deeply undervalued."

Despite the appearance of a new activist investor, don't expect Office Depot's stock bump to last. Activist investors almost always mean a short-term win for a stock, but long-term success is harder to come by.

Office Depot is behind the curve in many ways, most significantly in terms of online presence. Competition from Amazon.com (NASDAQ: AMZN  ) and even Wal-Mart.com (NYSE: WMT  ) is a killer for brick-and-mortars that are slow to adapt. Office Depot may be undervalued, but in this case, it's for good reason.

To learn about two retailers with prospects that couldn't be further from those of Office Depot, we invite you to take a look at The Motley Fool's special free report on The Real Cash Kings Changing the Face of Retail. In it, you'll see how these two companies are able to consistently outperform, and how they're planning to ride the waves of retail's changing tide. Click here now to access the report.

Chris Hill, Jason Moser, and Joe Magyer own shares of Amazon.com. The Motley Fool owns shares of Amazon.com and Staples. Motley Fool newsletter services recommend Amazon.com and Staples. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 18, 2012, at 11:18 PM, autoinsider wrote:

    Walmart and online retailers are eating these old computer brick & mortar stores' lunches.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2022045, ~/Articles/ArticleHandler.aspx, 12/20/2014 10:59:37 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement