Dump the Depot
Office Depot (ODP) is being cut for my Marketocracy S&P 500 portfolio. I've got some rules that I follow religiously and ODP violates them all. Very simply put my investments must meet some basic criteria:
1 - They must have current price appreciation in recent trading sessions
2 - Barchart's technical indicators must show a positive buy consensus
3 - The stock must be trading above it's 20, 50 and 100 day moving average
4 - The analysts should have a consensus of increasing sales and earnings projected for the future
Well how do the criteria stack up?
1 - In the last month the stock has closed lower 8 times and lost 20.76%
2 - Barchart's technical indicators have 12 of 13 sell signals
3 - The stock is trading below it's 20, 50 and 100 day moving average
4 - Analysts predict lower sales, operating profit and net earning for next year
5 - The nail in the coffin -- Analysts consensus is a 5 year compounded EPS loss of -24.9%
Recommendation - Despite some other sites having a hold recommendation I'm dropping ODP like a hot potato. They are too many companies out there making money for me to invest in a wing and a prayer.
Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com
Disclosure: no positions at the time of publication