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Xerox is NOT going Bankrupt

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July 21, 2012 – Comments (3) | RELATED TICKERS: XRX , SDRL

You would think the market thinks otherwise in light of the pounding this stock has taken.  This one bugs me.  It was one of the 3 stocks I picked for 2012.  The other 2 were Sandstorm and SDRL, both kicking butt from when I picked them.  Xerox hasn't. 

I don't understand the "hate."  They lowered year end PE projection, but if they meet guidance, say $1.10, this stock is selling for less than a 7 PE.  In addition they pay a decent dividend from a percentage point of view. The company spits out great FCF which they are using to lower outstanding shares dramatically (this is when I like stock repurchases, when the stock is at lows).  While the technology will hurt some from Europe, the IT part of the company is making major strides.  I won't give up on this stock.  I don't think this a "value trap" but rather the market not realizing the company is not just in the printer business.  I bought today and will keep buying at these levels.  I urge others to do the same.

3 Comments – Post Your Own

#1) On July 22, 2012 at 12:53 PM, HarryCarysGhost (99.69) wrote:

Just got around to looking at the numbers and yeah it does look damn cheap.Fits the Graham intristic model to a tee.

Best of luck to you.

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#2) On July 23, 2012 at 10:48 PM, Valyooo (99.35) wrote:

Yeah it wont go bankrupt but what is the point of buying a stock with negative growth?

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#3) On July 24, 2012 at 1:30 AM, awallejr (85.54) wrote:

Who said negative growth?  The ACS purchase has transformed this company.  EPS this year I submit 1.10.  Next year even higher.  You have a company yielding about 2.5% with about $2 BILLION free cash flow, half of which they will be using for stock repurchases.  This is not just a "printer company" anymore, something the market is not recognizing.  I like the fundamentals.  Yes Europe will be a drag, but the company is growing elsewhere. I still see this as a double.  My opinion free of charge. 

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