Hewlett Packard Enterprise Co. (HPE)

Yesterday, they reported what looked like a strong quarter. Shares popped after hours, but gave back those gains today. Shares have been flat 7-8 years, now dragged down by the messy Juniper Networks takeover, sloppy execution, and now Trump's on-again, off-again tariffs. Their March report was terrible, and shares tanked. Activist Elliott Mgt., though has gotten involved, which offers some hope. Yesterday's report was good: healthy revenue beat, strength across businesses, an earnings beat, good margins. Also, their AI systems is seeing a backlog. Guidance was guarded, but overall positive. Some products are made in Mexico, but comply to the CUSMA, so tariffs will be lower than expected. The quarter was fine, beating low expectations.

Though it trades at 10x PE, it remains in a highly competitive space, including Dell.

The last quarter was bad and put them in the penalty box. Buy Dell instead.

He's impressed with their recent showcase of AI plans. Their cost of operations is radically lower than what he expected.

With a P/E at 9.7x we would not say it is too late to buy HPE but the recent quarterly results did miss revenue forecasts which were slight cause for concern. On the otherhand, shares are trading at an all-time high so while the news is promising and it is cheap on an earnings basis we understand the concern. We would not expect too much growth out of HPE even with this news as it is more of a value investment that offers a decent yield of 2.85%.
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He sees good value in this. Generally sees good value in tech. May not be everyone’s pick as emphasis is on services side and software. With the pull back over the last few weeks, it is not a bad entry point. A move into this name now should be considered a short term trade. It is not a long term hold.

(A Top Pick Aug 29/16. Up 19%.) Thinks this will continue to do well.

This gives a little more enterprise security, and has a little more growthier things going on than HPQ-N. Less dividend yield, but more growth. It is struggling through a bit of earnings growth right now, so be a little cautious.

HP-N was old tech. It split and HPE-N is up 40% in his fund already. Everyone is confused. This part is the cloud, security, etc. The old one is the contract manufacturer. HPE-N is at EBV whereas peers are multiples of this. 31% upside.