Hewlett-Packard Company (HPQ)

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For value buy I would prefer investment in Hewlett Packard. Chartwise it looks to be entering a trough sideways movement quite cheap at usd 17 . So it means you are buying at bottom prices. They have changed several CEO's already the previous only lasted a year, many critics are predicting HP won't last beyond 2013 why I think this time is different.

The new CEO Meg whitman lets look at her. (source wikipedia)
worked for disney dreamworks p&g, was ceo for ebay and ran it for 10years transformed the company from a 4 million a year to 8 billion a year revenue company. ran for governor of califonia but lost

All these qualities shows me an ambitious person. She's already a billionaire so this means she's not doing it for the money, she more likely fits the profile of someone hungry to make her mark on the business world. Means she will die die whip HP into shape and prove all her critics wrong. I will be very surprised if she leaves before turning HP around and making it profitable again or at the very least try to orchestrate a white knight for HP.

Only very few companies have the resources to buy over HP.
IBM Oracle Microsoft.

Antitrust laws will unfortunately prevent IBM from buying out HP so that's out.

Oracle is sitting pretty on 29billion in cash reserves they bought over sun a few years ago and gained Sun's customers and Mark Hurd of oracle (previously ex-ceo of HP) have an axe to grind with HP but more importantly they also want to dominate business software and overtake microsoft or even kill microsoft market share. Buying over HP means it allows them to gain over HP's many enterprise customers which also uses oracle database products But they will also end up owning HP's problems.

Microsoft definately have the financial resources or have the means to buy out HP and HP owns compaq which is the largest pc desktop/laptop/server maker in the world which runs on microsoft os and microsoft products so there is definately synergies there and definately they will be anxious for HP not to fall to oracle.

So there we have it why I think HP is a good buy at these prices

comments comments Big Grin
For hpq, I liked it as a speculation play when it was around 12, but it's an insult as a value play at 17. No disrespect.

Hpq is a mess, a timebomb can explode anytime.
(22-01-2013, 07:14 PM)freedom Wrote: For hpq, I liked it as a speculation play when it was around 12, but it's an insult as a value play at 17. No disrespect.

Hpq is a mess, a timebomb can explode anytime.

One thing I learn after many years in the industry is that it is difficult to predict what's going to happen with technology companies. There's more to it than just looking at balance sheet or studying the annual report. Things can turn around and go on the mend in a few short years if they develop new products or technologies adopted by the masses, when it comes to tech companies I learned is better to withhold an opnion.

If you though ibm is good and wb buying it, in the 90's it was a different picture altogether I remember I started out with IBM equipment everybody was saying IBM is a dinosaur products are old they too big etc ... now look at ibm.

Sun micro developed JAVA language which was adopted by the masses that led to the dot.com era boom and bust we all know what happened. When it was down and out and losing market share everybody said that's the end of Sun micro then they got bought over by oracle and in a few short years reimaged and re-brand now everything is ok.

HP was doing well in the 90's when IBM was down, contrast now IBM is flying ... I can tell you we haven't seen the last of HP. Big Grin
Unlikely to be IBM. They sold away their own PC business to Lenova.

I like the Microsoft idea though. But HP itself is too big. There need to be some breakup.

Just my Diary

there was an analyst sometime back valued HP at over 40 billion if broken up and sold off in parts. Current value is about 13-15bil Big Grin

HP is now what IBM was in the 90's. IBM in the 90's was big they built everything by themselves sluggish just like what HP now. Will be interesting to see what Meg Whitman will do.
The Autonomy writedown just showed that HP does not know what they acquired. Just wonder how many acquisitions are in a similar positions. BTW, HP has done a lot of acquisition in the last few years.
not only autonomy writedown, EDS writedown too. estimated around 20billion worth of writedowns. Big Grin All these acquisitions happened during ex-ceo Mark Hurd time and now he works for oracle .. oh man.

Actually the core business that doing really really well are printer and scanner divisions, the enterprise server business is doing quite well, PC/laptops business under compaq are making low margins due to very high global competition, enterprise outsourcing business was doing quite well before but after buying over EDS and merging the unit into it now as a whole it's running at a loss. Cloud is a new business and can becoming a potential if global trend embraces low cost server movement.

What I see they just need to hive off or turn around 1-2 div that's weighing everything down and give it a few years they should be back.
Autonomy acquisition is by Leo ....

Just my Diary

HPQ seriously need consider to reduce or remove its dividend to pare down its debt. Its balance sheet is out of shape if further major write down is going to happen.

Given that "PC is dead"(though I don't subscribe such idea), HPQ could have more headwind ahead for its PC business.
HP reports drop in profit, revenue

SAN FRANCISCO — Battling a declining demand for personal computers, PC maker Hewlett-Packard reported lower first-quarter earnings yesterday (this morning, Singapore time).

HP said net income fell 16 per cent to US$1.2 billion (S$1.5 billion), or 63 US cents a share, from the year-ago quarter. Revenue fell 6 per cent to US$28.4 billion.

“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡

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