When we have selloffs like this in the general market, oftentimes solid companies become vastly undervalued. In my opinion, one such comany is HP Inc (NYSE:HPQ), which today hit a new 52-week low as confidence in both the company and the market in general has diminished. With that said, the stock is trading at a future PE ratio of around 5, meaning a 20% annual return is likely for anyone who is willing to jump into the stock on a long term basis.
While there are no lack of concerns over HP’s (NYSE:HPQ) future revenue streams, the company’s intellectual property, talent and future ambitions seem to be enough to at least maintain their current revenue and profit potential, if not grow them by 5-10% annually. Analysts expect the company to earn $1.86 per share this year and $1.96 per share next year, while shares are trading at just over $9 a piece. WIth 3D printing in the company’s future, and numerous other consumer-oriented visions in the works, the stock seems deeply undervalued at these prices.
The stock is down 1.78% or $0.16 following the news, hitting $9.12 per share. Approximately 824,550 shares traded hands. HPQ shares have declined 32.89% since July 8, 2015 and are currently downtrending. It has underperformed the S&P500 by 24.02%.
From a total of 25 analysts covering Hewlett-Packard (NYSE:HPQ) stock, 9 rate it a “Buy”, 0 a “Sell”, and 16 a “Hold”. This means that 36% of the ratings are positive. The highest target price is $45 while the lowest target price is $6. The mean of all analyst targets is $22.67 which is 148.57% above today’s ($9.12) stock price. Hewlett-Packard was the topic of 56 analyst reports since August 17, 2015 according to the firm StockzIntelligence Inc. Wells Fargo downgraded shares on January 7 to a “Market Perform” rating. Credit Suisse maintained shares with a”Outperform” rating and a $19 target share price in their report from a November 25. Argus Research maintained HPQ stock in a recent report from December 3 with a “Buy” rating. Brean Capital initiated the rating on November 6. Brean Capital has a “Buy” rating and a $18 price target on shares. Finally, Deutsche Bank maintained the stock with a “Buy” rating in a report they issued on a November 25.
The institutional sentiment decreased to 0.73 in Q2 2015. It’s down 0.13, from 0.86 in 2015Q2. The ratio turned negative, as 166 funds sold all their HP Inc shares they owned while 296 reduced their positions. 68 funds bought stakes while 269 increased their total positions. Institutions now own 1.37 billion shares which is 0.25% more than the previous share count of 1.37 billion in 2015Q2.
Okumus Fund Management Ltd. holds 15.04% of its total portfolio in HP Inc, equating to 4.49 million shares. Oldfield Partners Llp owns 7.34 million shares representing 13.5% of their total US portfolio. Moreover, Goodhaven Capital Management Llc has 6.88% of their total portfolio invested in the company, equating to 693,289 shares. The California-based Dorsal Capital Management Llc has a total of 5.3% of their portfolio invested in the stock. Sls Management Llc, a New York-based fund reported 264,490 shares owned.
Since March 5, 2015, the stock had 0 buys, and 10 selling transactions for a total of $16.30 million in net activity. Lesjak Catherine A sold 6,282 shares worth $165,531. Weisler Dion J sold 40,000 shares worth $1.01M. Fink Martin sold 23,069 shares worth $567,696. Ricci Jeff T sold 7,243 shares worth $186,073. The insider Youngjohns Robert sold 21,143 shares worth $543,164.
HP INC, formerly Hewlett-Packard Company , is a global well-known provider of products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses (SMBs) and large enterprises, including clients in the government, health and education sectors. The company has a market cap of $16.50 billion. The Firm offers IT industry’s broadest portfolios of services and products that bring infrastructure, software, and services through innovation to enable its clients to create value and solve business problems. It has 3.68 P/E ratio. The Firm creates its solutions to provide foundation, in the areas of security, cloud, mobility and big data, by leveraging the breadth of its offerings and the strengths and capabilities of its individual business units.