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Are Investors Undervaluing Office Depot (ODP) Right Now?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Office Depot (ODP - Free Report) . ODP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.07. This compares to its industry's average Forward P/E of 14.29. 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.

Investors will also notice that ODP has a PEG ratio of 0.47. 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 1.16. Over the last 12 months, ODP's PEG has been as high as 1.17 and as low as 0.29, with a median of 0.50.

Finally, investors should note that ODP has a P/CF ratio of 5.84. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. ODP's P/CF compares to its industry's average P/CF of 20.86. Over the past year, ODP's P/CF has been as high as 6.57 and as low as 3.09, with a median of 4.87.

These are just a handful of the figures considered in Office Depot's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ODP is an impressive value stock right now.




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