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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (49217)	8/26/2012 10:29:14 AM
From: Spekulatius	1 Recommendation Read Replies (1) \| Respond to of 78752

Re HPQ - fair enough, I agree that a stock can be too cheap to ignore, even with warts. I am not sure if HPQ is there but I invested in MRVL on the same premise. I believe the printer business has a huge secular headwind, in that the printing process itself is replaced by storing the documents digitally and displaying photos predomantly on LCD screens (ipads, TV's, computer sceens). We observed this with my wife (an avid photographer) and myself, where we just don't print the pictures any more. At work, The printer has become a combined printer/scanner/fax machine on a network and instead of printing stuff, I'll just let it create PDF's and sent them per email. My printing volume has gone down by ~70% probably suring the last few years. For Photo's, aside from color issues, I can get great displays on our TV screen that. I think this is a secular trend, that after creating pics went digital, now storing and looking at the photos will change too. So my guess is that people will still have a printer, but use it much less since printers are a razor/blade business model, where the profit is in the blade side, it means that the profits from this business pretty much are bound to come under severe pressure. My take is that this is going to be worse than PC's which I think are going to be much harder to replace. Going back to HPQ, I do think that Whitman is a better choice and hopefully will be able to steady the ship. What I am watching for with HPQ is new products that are exiting customers again. A company like HPQ need to have that but as far I know, they haven't come up with something really new in a decade.

To: Madharry who wrote (49217)	8/26/2012 2:15:58 PM
From: Paul Senior	1 Recommendation Read Replies (3) \| Respond to of 78752

HPQ: "equipment costs of $20 a year to be able to print." I've an HP LaserJet 1022 (an old printer) for which I have bought replacement cartridges about every 18 months or so from my local big box retailer. Price about $50 or $60+ (can't remember). They were out of stock about a month ago, so I decided to check Amazon. I've always been reluctant to buy off-brand cartridges, but I was astonished at the prices that I now saw -- one brand about $8; another brand $12. Whoa! And several of the user reviews seemed positive. So taking a chance for $20, I ordered one of each off-brand. And so far, the one I installed seems to be working out okay. (Of course, it's too soon to see what the useful life will be.) As a holder of a few shares of HPQ, this has made me wonder just how profitable the "razor blade" printer model is really working out for HP, given the availability of apparently much less expensive competitor cartridges. And what I should expect going forward from HP's business and the stock. So now I'm wavering if I will hold shares or sell for something where the business prospects are more visible to me. === I keep looking at Lexmark which is also a beat down stock. My experience now with my printer cartridges makes me wonder if Lexmark might be in a printer market saturated from years of competition and now as Clownbuck suggests--a drop in usage. To such an extent that LXK might be a value trap even at its low price and dividend yield. finance.yahoo.com