Office Depot Underperforming Staples

The Woodbridge Group has sent its fellow shareholders in Office Depot (NYSE: ODP) a letter giving their reasons for dissatisfaction with that company's current board of directors and management.

Certainly the one-year stock price chart for ODP helps them make their case. Last April, the price was flirting with $37 a share. That flirtation didn't go well. She kicked him to the curb.

A steady decline began in June, and led to what seemed in September to be a floor of $19. The stock moved up from that floor as far as $22, then fell back again, crashing into the basement. It's now move $11 a share.

This, though, doesn't make a case by itself. These are difficult times. Lots of companies arehaving trouble. So (the Woodbridge Group suggests) let's look at the competition: Staples (NYSE: SPLS).

Back when ODP was flirting with $37, SPLS's dalliance was with the more modest-sounding figure of $26.50.

While ODP has lost more than two-thirds of its value in the meantime, SPLS, which is also down, has lost only 16% of its value, since it is now at $22.40.

This comparison may be unfair. It is always possible in such cases that the stock that underperforms if we're looking at price is also the one that's been spitting out dividends. I haven't checked into that possibility here.

Still, the Woodbridge Group complains that on basic operational metrics, Staples outdoes Office Depot. Same store sales data, for example. Again, as with stock price, both company's have fallen, But the fall is much more dramatic in the one case than in the other. Same stock sales are down for Staples by 5%. They're down for Office Depot by 24%.

The annual meeting is scheduled for April 23, at the Boca Raton Marriot.

I'll look into this particular dispute somewhat further tomorrow.