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The Consumer Staples Select Sector SPDR ETF (XLP) was trading as low as $19.28 in March 2009. The index is currently trading at $39.74, or 106.1% above the low made in March 2009.

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In this article, I will feature one consumer stock that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.

  2. The stock is sold by no insiders in the month of intensive purchasing.

  3. At least two purchasers increase their holdings by more than 10%.

Office Depot (ODP) supplies office products and services. Office Depot has outperformed the Consumer Staples Select Sector SPDR ETF this year.

Insider buying over the last 30 days:

  • Joseph Vassalluzzo purchased 9,500 shares on Aug. 23 and currently holds 45,034 shares, or less than 0.1% of the company. Vassalluzzo serves as a director of the company.
  • Cynthia Jamison purchased 2,340 shares on Aug. 9 and currently holds 4,865 shares, or less than 0.1% of the company. Jamison is a member of a reporting group that owns in the aggregate more than 10% of the company.
  • Robert Nardelli purchased 2,331 shares on July 29 and currently holds 70,720 shares, or less than 0.1% of the company. Nardelli is a member of a reporting group that owns in the aggregate more than 10% of the company.

Financials

Office Depot reported second-quarter financial results on July 30 with the following highlights:

Revenue$2.4 billion
Net loss$64 million
Cash$472.0 million
Debt$649.6 million

Outlook

In regard to the third-quarter 2013 outlook, Office Depot expects total company sales to be down approximately 3% to 4% vs. the third quarter of 2012. This is based on low-single-digit sales decreases in North American Retail and a slight decline in BSD and mid-single-digit declines in International. Office Depot expects third-quarter 2013 adjusted EBIT to be up from the prior year. And for full-year 2013, Office Depot anticipates adjusted EBIT of approximately $130 million.

Competition

Office Depot's competitors include Staples (SPLS) and Wal-Mart Stores (WMT). Here is a table comparing these companies.

CompanyODPSPLSWMTIndustry Average (Specialty Retail, Other)
Market Cap:1.22B9.50B239.39B465.15M
Employees:38,00050,0202,000,0002.25K
Qtrly Rev Growth (yoy):-0.04-0.030.020.07
Revenue:10.45B24.05B473.00B640.98M
Gross Margin:0.300.260.250.33
EBITDA:244.48M1.93B36.65B36.33M
Operating Margin:0.010.060.060.04
Net Income:-168.25M-204.21M17.09BN/A
EPS:-0.60-0.385.140.08
P/E:N/AN/A14.2218.17
PEG (5 yr expected):N/A2.851.531.19
P/S:0.120.390.510.86

Office Depot is trading below the industry average P/S ratio, which could explain some of the insider buying. Staples has seen seven insider sell transactions and one insider buy transaction this year. Wal-Mart has seen seven insider sell transactions this year.

Conclusion

There have been three different insiders buying Office Depot and there have not been any insiders selling Office Depot during the last 30 days. Two out of these three insiders increased their holdings by more than 10%. Office Depot has an insider ownership of 1.70%. There is one analyst buy rating, 13 neutral ratings, and one sell rating with an average target price of $4.63. Office Depot is trading at a forward P/E ratio of 56.13 and the company has a book value of $2.03 per share. The 200-day moving average is currently at $3.96, which could be a good entry point for the stock.

Source: Insiders Are Buying Office Depot