Why I'm Dropping Office Depot

Jan.29.10 | About: Office Depot (ODP)
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:
  • They must have current price appreciation in recent trading sessions
  • Barchart's technical indicators must show a positive buy consensus
  • The stock must be trading above it's 20, 50 and 100 day moving average
  • The analysts should have a consensus of increasing sales and earnings projected for the future

Well how do the criteria stack up?

  • In the last month the stock has closed lower 8 times and lost 20.76%
  • Barchart's technical indicators have 12 of 13 sell signals
  • The stock is trading below it's 20, 50 and 100 day moving average
  • Analysts predict lower sales, operating profit and net earning for next year
  • 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. There are too many companies out there making money for me to invest in a wing and a prayer.

Disclosure: no positions at the time of publication