Q. My OfficeMax Inc. shares have done better lately. What does the future hold? — P.K., via the Internet

A. The No. 3 US office products firm is continuing its cost-cutting efforts in an attempt to improve its profitability and sales in a highly competitive business hampered by the weak economy.

It isn't, for example, opening any new stores this year. It is also increasing the number of private-label products bearing its name to lure shoppers with lower prices while expanding profit margins. About one-fourth of its sales are currently private-label.

It expects sales to decline in the second half of the year due to cutbacks in corporate America, the economy and what is projected to be a lacklustre back-to-school season.

Shares of OfficeMax (OMX) are up 31 percent this year following drops of 61 percent last year and 57 percent in 2007. While the company lost $17.7 million in the second quarter, the fact that Wall Street had expected far worse provided a boost to its stock.

OfficeMax sells through a direct sales force, the Internet and catalogs. It has improved its profitability but still lacks the economies of scale of its larger rivals and must compete with numerous retailers that have begun to sell office products.

No. 1 Staples, whose profits were down 33 percent in the past quarter on economic woes, has more than 1,500 stores and is taking market share away from OfficeMax's main Chicago sales area. It bought the Dutch office-supply firm Corporate Express NV last year. In comparison, No. 2 Office Depot has more than 1,200 stores and OfficeMax fewer than 1,000.

The consensus recommendation on OfficeMax shares is "hold," according to Thomson Reuters, which consists of one "strong buy," three "buys" and seven "holds."

Yet OfficeMax still remains aggressive. It recently signed a multiyear deal that will allow it to use some FedEx Corp. services in about 900 US retail locations. It is offering domestic FedEx Express and ground shipping, while it will accept drop-off packages from FedEx customers at its in-store print and document services center.

The company has also forged an alliance with Lyreco, a global distributor of office products in 36 countries, and has a partnership to distribute co-branded office products through 1,600 Safeway grocery stores.

Earnings are expected to decline 75 percent this year compared with a 6 percent gain projected for the office supplies industry. The forecast is for a 50 percent gain next year versus a 13 percent rise industry-wide.

Q. Please give your opinion of Oakmark Global I Fund. — V.B., via the Internet

A. This concentrated fund of 38 holdings has done a good job of finding cheap stocks that have been beaten up for one reason or another.

It invests in companies from around the world, including the US, and isn't afraid to build big positions in individual names, sectors or countries.

The confidence level of its portfolio managers allows it to invest in out-of-favour areas such as carmakers Daimler AG and Toyota Motor Corp., as well as financials Daiwa Securities and Julius Baer Holding Ltd. The fact that Japan has been in an economic malaise doesn't seem to bother the managers.

The $1.38 billion Oakmark Global I (OAKGX) is down 13 percent over the past 12 months and has a three-year annualised decline of two percent. Both results rank in the upper one-fifth of world stock funds.