United Stationers, Inc.

United Stationers, Inc. (USTR - Snapshot Report) has had a fairly challenging year, with its stock price sheding close to 45% of its value and trading down to just $42. Within the last seven days, one of two covering analysts had increased next-year estimates, pushing the next-year consensus estimate significantly higher. This provided its stock price with a solid boost and altered its short-term momentum picture.

Full Analysis

United Stationers, Inc. engages in the wholesale distribution of business products in North America. The company offers both computer supplies and peripherals as well as janitorial and sanitation products. It sells its products through distribution networks, catalogs, and Internet. The company was founded in 1922 and is headquartered in Deerfield, Illinois.

The company's most recent quarterly report was respectable, with a slight jump in revenue. Total sales for the third quarter were up 1.5% to $1.2 billion, compared to the same period last year. Earnings per share totaled $1.00, up sharply from 83 cents per share from the same quarter last year when adjusted for one-time inclusions.

On Nov 15, United Stationers announced that its wholly owned subsidiary, United Stationers Supply Co., signed an agreement with Brazos Private Equity Partners to acquire 100% of the outstanding shares of ORS Nasco Holdings, Inc. Ors Nasco is a wholesale distributor of industrial supplies, sells exclusively to independent distributors, and has annual sales of approximately $285 million. The all-cash purchase price totaled $180 million.

Richard W. Gochnauer, president and chief executive officer of United Stationers, said that "acquiring ORS Nasco will diversify our product offering and provide us entry into the estimated $22 billion wholesale industrial supplies market."

Within the past seven days, United Stationer's estimates have been seriously increased by one of two covering analysts. The next-quarter consensus estimate has gained 11 cents, jumping to $1.18 per share. The next-year consensus estimate has tacked on an additional 23 cents, moving to its current reading of $4.45 per share.

United Stationers is a company that knows how to beat analyst estimates, as seen by its performance over the last four quarters. In spite of a narrow miss, by one penny in the second quarter, the company has surprised and beaten estimates over this period by an average of eight cents, or 9.92%. United is set to report again on Feb 14.

United has an excellent ROE reading of 15.29%, easily trumping the industry average of 12.6%. Its price/book multiple is just 2.11.

As previously mentioned, United's stock price logged a disapointing performance in 2007, dropping close to 45% of its value. But within the last week, shares appear to have found a bottom and have rebounded nicely. On Jan 9, shares of USTR dipped below $43, and have since logged some solid gains, moving as high as $50. This strong close above the previous short-term resistance level of $47.50 bodes well for shareholders. Look for this stock to sustain itself in this area and eventually build upon its impressive start to 2008.