Supplies can be fun and good for investors.
Let’s face it: For a good number of us, office supplies are fun, and we’re not just talking about those mini desktop backboards with the puffy foam basketballs. Pens and Post-it notes come in enough shades to fill a paint store. Today’s computers boast stunning graphics. Funky briefcases and backpacks are created to suit every taste and budget. But there’s also a time to get serious about office supplies: when you invest in the companies that make and sell them. From time-honored brands to big-box behemoths, delivery powerhouses to houses of storage solutions, these eight stocks from the office supply sector are officially ready for your annual performance review.
ACCO Brands Corp. (NYSE: ACCO)
While the ACCO name won’t be familiar to many office jockeys, its products rank among the most popular: Swingline staplers, Mead Five-Star notebooks and Day Runner planners among them. As for ACCO’s Big Board business acumen, the stock has weathered a mixed 2017, up nearly 5 percent overall but down 10 percent since April 27. Yet buoyed by acquisitions, ACCO has rebounded 25 percent since August’s quarterly report, which reflected a net sales jump of 19 percent to $490 million.
3M Co. (MMM)
Post-it notes. Scotch tape. And 100,000 global patents, a mark the St. Paul-based company passed in 2014. 3M is famous for its “15 percent rule,” named for how much time employees spend on “experimental doodling.” Here’s a corollary: “It’s all about the nearly 6 percent of revenue 3M spends on research and development every year,” says Barry Randall, technology portfolio manager for Boston-based Interactive Brokers Asset Management. Result: MMM stock is up more than a fourth this year.
FedEx Corp. (FDX)
FedEx delivers, you could say: 13 out of 18 analysts surveyed recommend the Memphis-based company as a “strong buy,” compared to four a “hold” and none a “sell.” Yet 2017 has fueled an odd roller-coaster ride; after FDX closed a record fiscal year in June, September’s quarterly report reflected a nasty year-over-year dive of 17 percent in earnings per share. Call it a combined consequence of Hurricane Harvey and a cyberattack on TNT Express, FedEx’s recently acquired subsidiary.
Newell Brands (NWL)
The next time you pick up a Sharpie, wield an Xacto knife or slop on some Elmer’s Glue, you can thank this Hoboken, New Jersey company. Newell also owns Rubbermaid, though that hasn’t stopped the spoilage of NWL stock, off 31 percent in November alone. As with FedEx, you can chalk it up in part to Hurricane Harvey, which has hurt Newell’s supply lines and led to a cut in the company’s 2017 earnings outlook.
Microsoft Corp. (MSFT)
The house that Bill Gates built has made smart expansions into areas such as cloud computing. Since November 2012, MSFT has steadily tripled to $83 per share. Then there’s Microsoft’s 2016 purchase of LinkedIn for $26.2 billion. That breaks down to $54 per LinkedIn user and arguably a drag on the software behemoth. “I don’t think LinkedIn will become a meaningful source of revenue to investors,” says Peter Cohan, lecturer of strategy at Babson College in Wellesley, Massachusetts.
Office Depot (ODP)
OfficeMax and Office Depot merged in 2013 — who could ever tell them apart? — and the company could get even bigger. After the Federal Trade Commission blocked a $6.3 billion merger with Staples in 2016, private-equity firm Sycamore Partners bought Staples for $6.9 billion in June. Now, Sycamore reportedly wants to sell 1,500 brick-and-mortar Staples locations to ODP. That would make ODP the nation’s only big-box office supply store — and perhaps stop a 47 percent share price slide since August.
Apple (AAPL)
At its core, Apple is a computer company that powers many home and business offices. It lost its innovative edge after co-founder Steve Jobs died in 2011 — don’t expect anything as revolutionary as the iPhone again — but CEO Tim Cook has done yeoman’s work building Apple’s value. With a market cap of $878.5 billion, Apple could become the first trillion-dollar company in history. Meanwhile, the stock has soared more than 50 percent over the last 12 months.
Container Store Group (TCS)
For the white-collar storage geek in us all, The Container Store represents a playpen — a very organized playpen. But investing in TCS requires tolerance for disarray. Eleven months of staggering have lopped the stock by a third — but the current $5 share price reflects a 46 percent jump since Nov. 3. Just-released earnings and revenue beat Wall Street expectations, even as the Texas-based company revised its sales outlook fiscal 2017 to a minimum of $845 million, up from $830 million.
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8 Ways to Invest in Office Supply Stocks originally appeared on usnews.com
