Hewlett-Packard Company (NYSE:HPQ)

CEO changed. Clear strategy

Good P/E Ratio, positive MACD, higher than the 50 200 day SMA lines, should be a good pick since it offers a dividend as well

Large PC/Printer Co. will right itself over the next twelve months and regain a proper direction.

fortunes are reversing to the positive with new leadership, and nice PE / Yield #'s

342. Hewlett-Packart (NYSE: HPQ) is looking really cheap. It's a dog of the dow by some metrics. That's where you want to be if you ask me. I think Hewlett-Packard put in a solid bottom at below $25. Target: $30-$35. They faced some challenges in 2011 that they don't expect will continue into 2012. I'm betting caps points on this one. Outperform. I think that a few years from now you might regret not throwing a growth multiple on HP's earnings at present. Don't believe me? Wait and see.

http://beta.fool.com/bradford86/2012/02/01/whats-it-worth-56/1570/

Undervalued because of 2010 executive missteps. New leadership will drive success.

Ultrabooks!

HP is too big into the Windows/PC market which is becoming increasingly irrelevant. They've had leadership problems since Fiorina shook things up. Meg doesn't know the world of PC manufacturing, either.

This is tracking porfortlio of the 20 stock I pick for 2012...

No business plan; no leadership; no consistency: unfortunately, the quality of the products it does make (it does still make printers, right?) won't be enough to save it.

I just want to say one word to you. Just one word. Are you listening? Memristors.

I give hp a chance

Oversold

insanely cheap even with most worst case scenarios

HP has a dominant position in printers and a large market share for PCs, as well as a giant free cash flow. But the corporation will need to deal with the grossly overpaid for Autonomy, regain shareholder trust, and do something to avoid being locked out of tablets, which are the wave of the future. This stock will struggle, like the corporation, for the next year or so. But I do believe that Meg Whitman will turn things around.

Hewlett-Packard Company long-term options (LEAPS), currently offer CAPS members an interesting risk/reward opportunity. This is illustrated below.

Financial Analysis

HPQ traded at an average high PE of 22 and an average low PE of 14. Compared to the forward P/E of 6.25, even returning to the historical average low trading levels would represent more than a 100% increase in share price. We believe that with consistent performance over the next 18 months, that the Hewlett-Packard may reasonably trade at 10x’s earnings or more.

HPQ’s average 5-year growth rate in EPS was 35%, compared with 11% for the average 3-year growth rate in EPS. Although potentially out of reach in the short-to-mid-term, we believe enough opportunity exists in cloud computing and business consulting for the Company to return to average EPS growth in the low teens over the long-term.

Challenges

There is ample reason for the abnormally low share price. Hewlett-Packard (HPQ) has saddled itself unnecessarily with significant challenges over the past decade, and at the same time has damaged its reputation for innovation. The Company has demonstrated an alarming lack of Strategic direction at the Board and Executive levels. From Carly Fiorina's questionable acquisition of Compaq; to CEO Mark Hurd's emphasis on cost-cutting at the expense of R&D; to Leo Apotheker's overly-rich acquisition of Autonomy and abrupt messaging surrounding the discontinuation of the Touchpad and the divestiture of the PC business; HP has triggered more than its share of market confusion. In addition, Hewlett-Packard’s debt position after the Autonomy acquisition is approaching excessive levels.

As a result of the above, the Street is appropriately punishing the Company with historically low earnings multiples, both for Hewlett-Packard and for the High Tech Industry. However, we view the current discount as overly severe, and thus believe significant long-term upside potential exists in the shares anywhere under $30. The shares are trading as if the Market expects a downward spiral ending in the obsolescence of its major sectors. This is unwarranted. Despite the rushed appointment of Meg Whitman as CEO, we are cautiously optimistic in the subsequent strategic discipline the Company is imposing on itself, and an increased focus on R&D should return the Company to respectable growth.

LEAPS Opportunity

Long-Term Equity Anticipation Securities (“LEAPS”) Calls on HPQ offer an interesting risk/reward ratio. By picking up the January 2013 or 2014 Calls, one may currently gain access to the same upside potential at a small fraction of the price of the shares, all while not overly sacrificing on a long-term time horizon.

Although we like the shares of HP at current levels of approximately $25, we understand that not all discerning investors will be comfortable with the recent leadership vaccum and strategic ambiguity. In order to participate in any short-to-mid-term appreciation in the shares, without having to outlay the entire principal necessary to purchase the shares now, we were compelled to purchase the $25 and $30 January 2013 LEAPS CALLS at $3.37 and $2.08, respectively. The typically low beta attached to the stock allowed for significant value in the 2013 LEAPS after the stock cratered in August and September. We would generally have preferred to purchase January 2014 LEAPS, in that the extra year until expiration provides significant protection against time erosion, but the LEAPS were not yet available when we wished to establish the position, and by the time they were priced, the 2013 LEAPS had appreciated substantially. Although the LEAPS have recently come down in price, we expect the January 2013 and 2014 LEAPS to appreciate significantly over the coming months as the Market regains confidence in the Company’s direction, and removes the excessive discount currently imposed on the shares.

Baupost group recently added a huge position.

12/17

Baupost buying, figured the least i could do was put this in CAPS...