We keep an eye out for companies that are truly struggling and may be headed for disaster. Stocks on are watch list are typically losing money, filing for bankruptcy or fighting to survive. We urge investors to do their homework when a company reaches this stage. Office Depot will have to something miraculous to dig its way out of the hole it has dug.
Office Depot has found itself adrift since the Federal Trade Commission blocked rival Staples’ attempt to buy the struggling office supplies store in 2015. Unable to effectively compete against the larger Staples and Amazon, the company—after shedding several stores in 2014—has entered the business cloud services market. This placed the company in direct competition with Amazon once more, with predictable results.
Rating: Smells Like Trouble