Seeking Alpha

CDM Capital

View as an RSS Feed
PRO Top Ideas
Top Ideas are high-conviction long or short ideas focused on market mispricings with asymmetric risk/reward profiles.
  • Staples: Industry Consolidation Leading To 50% Upside
       • Thu, Apr. 17 SPLS 45 Comments


    • The poor quarter was negatively skewed by difficult comps against a 53rd week, unfavorable foreign exchange rates, and 109 store closures.
    • The market systematically underestimates the speed at which industry consolidation will take place between Office Depot and Office Max.
    • The street under appreciates Staples market leading position, as well as its growing e-commerce business.
    • Private equity is likely a potential suitor in a non-levered high free cash flow retailer with significant hidden value in its online business.
    • Business trades at around 10x LTM earnings, with significant free cash flow levers starting in 2015.