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Hewlett-Packard Company (HPQ), first discussed on April 24, 2009 at a price of $35.80, appears to have made it through its summer swan dive. Shares swooned from about $55 to $37.32 -- coming close to the sell/stop loss at $36, but then found support and have since moved back above the key, 50-day moving average and the $40-level.
Hewlett is still preferred, here, and look at the recent price dip this way: with a P/E of about 9, HPQ is on sale -- for those investors who can tolerate the risk.
Hewlett remains well-positioned to increase market share in PCs, servers, printers, and IT services in 2011. The company's cost reduction efforts have gone reasonably well, and it's made progress re-positioning its customer services operation to become the one-stop shop that many customers seek. Look for 2010 revenue to rise 9-11%, followed by a 5-7% increase in 2011.
Further, recent acquisitions of ArcSight (security and compliance software), 3PAR (data storage) Fortify Software (cyber security), and Stratavia (application automation technology), will diversify HPQ's product line and help create that aforementioned one-stop data solutions center.
The Thomson Reuters First Call FY2010/FY2011 EPS estimates for HPQ are $5.11 to $5.58.
2011 Outlook: I view Hewlett as a long-term play, but if you're looking to sell HPQ within the year, it's probably best to take your profits after it rises to $48-49, if it fails to clear $50.
Stock Analysis: I consider Hewlett-Packard to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 25% position in HPQ now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, I wouldn't buy more than 50% of my HPQ position before January 2011 and I'd put a sell/stop loss at: $36.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
Further, recent acquisitions of ArcSight (security and compliance software), 3PAR (data storage) Fortify Software (cyber security), and Stratavia (application automation technology), will diversify HPQ's product line and help create that aforementioned one-stop data solutions center.
The Thomson Reuters First Call FY2010/FY2011 EPS estimates for HPQ are $5.11 to $5.58.
2011 Outlook: I view Hewlett as a long-term play, but if you're looking to sell HPQ within the year, it's probably best to take your profits after it rises to $48-49, if it fails to clear $50.
Stock Analysis: I consider Hewlett-Packard to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 25% position in HPQ now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, I wouldn't buy more than 50% of my HPQ position before January 2011 and I'd put a sell/stop loss at: $36.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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