Hewlett-Packard Company (NYSE:HPQ)

CAPS Rating: 2 out of 5

Hewlett-Packard aims to offer it all in the tech world, from hardware and servers to technology services to enterprise IT management.

Recs

5
Player Avatar buckazoid (95.53) Submitted: 8/19/2011 1:48:53 PM : Outperform Start Price: $21.87 HPQ Score: -9.77

HPQ lost a whopping 20% of its stock price today, the day it announced it would shed its PC and tablet business.While I understand HP is in a tough spot, I think getting rid of this low-margin business is the right decision. Does this mean HP has a bright, long-term future ahead? Not necessarily. But at a P/E ratio of 6, and assuming that a buyer for the PC business can be found (remember, Siemens and IBM have done the same thing), I remain optimistic in the short to medium term, if only for a rebound.

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Member Avatar forexnutca (86.11) Submitted: 8/19/2011 4:36:59 PM
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33% of their REVs come from their services while PC's and tablets account for very little.....you would think the stock price would respond in a favorable manner, but this market irrational. The "world is ending", and HPQ is on fire sale.....Tech is on a fire sale. Now is the time to pick up some huge names with huge cash....CSCO, HPQ, RIMM, MSFT, GOOG, AAPL.....buy em all....we're going into a M&A boom!

Member Avatar kristm (99.75) Submitted: 8/20/2011 10:13:35 PM
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This may just be Wall Street's way of punishing HP for ridiculous expensive decisions like buying Palm in the first place, and a general feeling of concern about their lack of direction and uncertain future. The consumer computer market CAN be profitable, but HP's current no-gonads management would rather give up on it than make it into what it could be.

Member Avatar ikkyu2 (99.29) Submitted: 8/31/2011 2:26:59 AM
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You're right. After all, having management with no vision isn't that important in the tech sector - a ham sandwich could run most of these companies. Just ask Digital Equipment Corporation, Gateway, Compaq, Texas Instruments - all at one time leaders in their field! Have they rebounded yet?

Sure they have.

Member Avatar buckazoid (95.53) Submitted: 9/2/2011 3:08:31 PM
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Guys I fully agree on all your points about management having some scope for improvement.

All I'm saying is that the market has hit HPQ much harder than it deserved for this particular move, in spite of that. Especially given that none of their fundamental situation has changed since the previous week and also that a P/E ration of around 6 counts as cheap to me.

A tactical market move, contrary to my strategy that is usually long-term, fundamental picks.

Member Avatar CaptainNeigh (29.70) Submitted: 9/30/2011 6:20:58 PM
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no one needs 50 computer businesses.

Member Avatar davidm9999 (< 20) Submitted: 10/18/2011 1:42:22 AM
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So basically, HP is going to be a $50bn company by selling laptops? I don't get it.... SNE sells laptops, PS3's, and a range of other stuff and it's priced at $20bn. HP is dunzo. And Meg Whitman looks like Medusa, so that can't help anything either

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