Tomahawk, WI 7/29/2013 (Basicsmedia) – Every investor is often forced to ask this question, regardless of which company he/she has investments in. Investors with stake in OfficeMax Inc (NYSE:OMX) are not any different from their colleagues elsewhere. This article aims to take a look at the possible threats to OMX investments, if there are any, and advice investors accordingly on whether they need to stay put, or ship out. Mostly, this would be done by looking at the company’s financial records and trends in the last year or so, and compare these returns with what is currently going on within the company and industry as a whole.

How Much Does OMX Earn in Revenue P.A?

OMX has been enjoying, or has just reported revenues of $6.9b for the last financial year. The revenue is only important when the profits are just as impressive. What were its profits for the last year? OMX reported profits of $416.8m for the last financial year. In order to get a better understanding of what this presents, I take a look at whether the profit margins were positive or negative for the same period. The good news OMX is that it enjoyed a positive profit margin of 6.02% for the last financial year. To the investor, this is all good news since it shows there weren’t any losses.

These figures are not quite bad when compared to what is happening within the industry where OMX operates. The company’s main competitors include ODP, USTR and SPLS, which have reported percentage change today of -0.56%, +0.17% and -0.61% respectively compared to -0.59% of OMX. The average volume of OMX shares moved in the last three months are 1.3m. Out of this, there has been a dividend yield of around 0.69%. With all this being said, what are the forecasts into the next 12 months compared with the last 12 months? The diagram below offers a better illustration.

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Image courtesy of http://money.cnn.com/quote/quote.html?symb=OMX

Its performance in the last 52-week period has been quite impressive. It has enjoyed a high of $14.92, and a low of $4.26. When you compare this with the current $11.57, then this should offer a good indicator that the performance of its stock is solid and quite good. The forecasts indicates that there is likely to be growth where stock will attract a high of up to $17.00, signifying an increase of around +46.6%, and a low of $6.50, signifying a drop of -44.0%. Since the management is relatively stable, and the fact that the company enjoys a fairly stable market share, one can look to the future with optimism.

OMX’s Detailed Profile

In order to get a better understanding regarding what to look out for, one also needs to consider the profile of OMX in details. The company operates within the retail trade sector, and the specialty stores industry. Its president, CEO and director is Ravichandra K. Saligram, a holder of MBA. Its EVP and Chief Financial Officer and Chief Administrative Officer is Bruce H. Besanko, also a holder of MBA.  The corporate headquarters of OMX is Naperville, Illinois.

What would be my recommendation? I would say that there is reason to be optimistic, though this should be done with some caution.

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