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Should Value Investors Buy Office Depot (ODP) Stock?

CWCO vs. GWRS: Which Stock Is the Better Value Option?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Office Depot (ODP) is a stock many investors are watching right now. ODP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 8.26 right now. For comparison, its industry sports an average P/E of 13.53. ODP's Forward P/E has been as high as 9.47 and as low as 4.42, with a median of 7.26, all within the past year.

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ODP is also sporting a PEG ratio of 0.48. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ODP's industry currently sports an average PEG of 1. ODP's PEG has been as high as 1.17 and as low as 0.29, with a median of 0.52, all within the past year.

Finally, investors will want to recognize that ODP has a P/CF ratio of 5.92. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.73. Over the past 52 weeks, ODP's P/CF has been as high as 6.52 and as low as 3.10, with a median of 4.83.

Value investors will likely look at more than just these metrics, but the above data helps show that Office Depot is likely undervalued currently. And when considering the strength of its earnings outlook, ODP sticks out at as one of the market's strongest value stocks.


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