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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (48718)7/24/2012 12:24:51 AM
From: 8bits1 Recommendation   of 78740
 
Re HPQ - I the problem with HPQ is which metrics to use. It is cheap based on last years metrics and maybe on this years metrics but I have no confidence in next years estimates, hence my conclusion that HPQ is not a value stock ( for me)- it's a turnaround play, as far as I am concerned (maybe an OK one). I don't even think it's sure thing that HPQ is still around in 5 years.

I work for a company that is a direct competitor of several divisions of HPQ. The big difference between the two is my company shed most of it's low margin product lines when the economy was good and now concentrates on higher margin products. (Enterprise software, high end Unix systems, etc..) I can't see HP improving their rapidly compressing margins absent a new winning product line. The server division is making them decent money but I see their laptop/desktop division as being an anchor.

I think an interesting play (as I discovered that Canon makes the print engine for many of HPQ's printers..I look inot the former...) is CAJ. Granted they are facing similar problems to HPQ (Printer business.. rapidly shrinking market for point and shoot cameras...) but they have a decent amount of cash and have room to cut costs. (The majority of their production is still in Japan..) As of today's close they are paying a 4% but it is probably too early to enter a position.
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