several poisonous problems ahead for HPQ. 1. Dell getting feisty, attacking retailers from it's former direct-only model. Competition brutal, in other words. Same goes for Lexmark, Lenovo, Acer, eeePC, etc... 2. Apple. This is where true computer growth exists today, and virtually ALL of the margin. The apple trend will continue. 3. Economy. Component prices won't go down forever, inflation on the consumer is a risk, as is consumer disposable income. Also, believe we are slowly moving towards true paperless economy, not good for home printer business. All that said, CEO h...
CXO Advisory Group monitors a lenghty list of Gurus and their related market calls. But the rankings are misleading for the reasons given below. The current list of leading gurus who have an accuracy call of 50% or higher is given below. Click to enlarge:
I have been following Dell (NASDAQ: DELL) since its 1988 IPO. No question, this was a mega-gamechanger company for years. The vision of Michael Dell creating this company from his University of Texas dorm room is inspiring. The dorm room became the new substitute for company creation as the Hewlett-Packard (NYSE: HPQ) garage served beforehand. Dell was a great American success story---but the key here is WAS.
Not to be outdone by the 8 Golds won in Beijing by Michael Phelps, or Jamaica's Usain Bolt's 100-200m World Record double, Hewlett-Packard (HPQ) showed its quickness in dealing with eroding economic conditions and the apparent stagnation in technology spending. The company reported a quarter besting analyst expectations in all key metrics, sending shares higher.
The computer company reported earnings of $2.03Billion ($0.80/share and $0.86/share excluding certain costs), which compared favourably to the $0.84/share expected by analysts. On the revenue side, the street wanted $27.4Billion, b
5/21 - "Upside resulted from better margins (+$0.02) and stock buybacks (+$0.02) offset by lower interest income (-$0.01). We reiterate our Buy opinion and are raising our price objective to $57 (from $56)...We are raising our FY08 EPS estimate from $3.54 to $3.59, and FY09 from $4.00 to $4.07."
"Industry Standard Server growth was weaker than expected owing to some missed deals. Business Critical Server trends are improving, especially in North America. Storage results improved after struggling for several quarters. In IPG (Imaging & Printing Group), strong supplies growth accounted for t...
5/21 - "Buoyed by a strong international presence in fast growing markets, a rich mix of IT product lines, and continually improving cost discipline, HPQ is demonstrating its ability to outperform even in a somewhat challenged macro environment. Consequently, we reiterate our Buy rating and $57 target based on 16x our F08 EPS of $3.56."
"Margin improvements continued with GM of 24.8% (up 30bps seq.) and op. margin of 10.0% (up 10bps seq.) due to continued favorable component environment, disciplined pricing and cost controls...Geographically, 69% of revenue was generated outside the US (si...
5/21 - "We maintain our Buy recommendation on Hewlett-Packard Company (HPQ) on the back of the company’s second-quarter results, as we believe the world's biggest computer maker is well positioned with 70 percent of its revenue and virtually all its growth coming from international markets. The company has maintained a strong competitive position against is closest rivals, IBM (IBM) and Dell (DELL)."
"The stock is currently trading at a P/E multiple of 13.1x our 2008 EPS estimate of $3.56, which is a discount to the industry average and its closest peers, Dell and IBM. Given its continued ...
5/21 - "Looking through the release, I see quite a few things to like about the H-P story...Revenues increased 11% to $28.3 billion. This increase was aided by international sales and the weak dollar...the adjusted operating margin increased 100 basis points to 10%. Cash generated from operations was $4.8 billion during the quarter, which the release categorized as a record statistic."
"Honestly, it seems like H-P is managing itself very skillfully, leveraging its various brands in the PC sector to great effect. Guidance calls for adjusted earnings of $3.54 and $3.58. This means that, in m...
5/13 - "Clearly, the Street is not crazy about Hewlett-Packard’s (HPQ) plan to acquired Electronic Data Systems (EDS). In two days, the Street has knocked about 10% off HP’s stock price, chopping its market cap by about $12.5 billion, almost equal to the $13.9 billion deal price. The obvious question is, why?...And the answer is, there are several reasons."
"Toni Sacconaghi, an analyst at Bernstein Research, notes that since 2002, EDS has generated annual revenue growth of just 0.4% versus 8% for HP. And he notes that gross margins at EDS are around 15%, versus 24% for HP. “Given that we d...
5/14 - "Clearly, the intent of the deal is to challenge IBM’s supremacy in IT services. IBM claims the largest share of the international IT services market with 7.2%, according to Gartner Inc. EDS is second with a 3% share, and HP is fifth with 2.3%. As with any large scale merger there will be organizational difficulties and differences of corporate culture, but this merger should provide much upside for HP."
"The IT service group is obviously a focal point for HP CEO Mark Hurd’s growth strategy and many analysts foresee the industry as a whole growing at a steady 8% clip of the next 5 y...
5/13 - "While this combination would make HP the second largest, behind International Business Machines (NYSE: IBM) in computer services, this may not be a good way to spend $12.8 billion...That's because EDS and HP would under perform in services when it comes to profitability. EDS's bigger business earned a 1% net profit margin in the first quarter. But HP's services business generated a far higher 9% estimated net margin."
"Now may be a good time to sell HP stock. Mark Hurd came into HP as a nuts-and-bolts operator. This deal suggests that Hurd has run out of growth options and that HP ...
Recap of CNBC's Fast Money, Friday May 9. Click on a stock ticker for more analysis.
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Fed Ex (FDX), UPS (UPS)
Fed Ex's warning not only sent its own shares down, but has implications for UPS and retail, and will have a positive impact on rails, Guy Adami said. Najarian noted FDX's warning is consistent with the rising price of oil, and a decline in oil may be good for FDX. Macke says UPS might be a buying opportunity.
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