Opinions
John Zechner
Hewlett-Packard Co
HPQ-N
COMMENT
Aug 17, 2012
Stock price when the opinion was issued
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Premium contentHP trades at 11.83x compared to Dell’s 28x. It also pays a 3.18% dividend vs. Dell’s 1.28%. Though the two companies make up half the market’s PC sales, HP says its new line of AI PC’s won’t make a dent in their earnings until the second half of 2024 and particularly 2025. The company’s Q2 total revenue for was $12.8 billion, down slightly from last year's $12.91 billion, but better than the $12.59 billion the street expected.
Premium contentHP Inc. is an information technology company, which engages in the provision of personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services. It operates through the following segments: Personal Systems, Printing, and Corporate Investments. The Personal Systems segment offers commercial and consumer desktop and notebook personal computers, workstations, thin clients, commercial tablets and mobility devices, retail point-of-sale systems, displays and other related accessories, software, support, and services for the commercial and consumer markets.
Low PE and bundles of cash. Has been considering this one. Their problem is that in restructuring they are not in the right place right now. Getting squeezed out on the printers and the PC and printer market in general is getting by what is going on with the Pads and Tablets. Looking at the multiple, cash generation and the core businesses, he is ready to take a swing at this at $20 or under. Very little downside. Not a growth play, it’s a value play. Bit of a dark horse now.