Hewlett-Packard Co (HPQ)

Doesn’t think there is that much room left to run. He was shocked when it got down to $12 last year. The growth has now been reflected in its move. They are in businesses that are in a lot of trouble. Probably 60% of their businesses are really shrinking.

(A top pick Jan 30/13. Up 76.68%.) Have 4 major divisions and he broke each of these down with the premise that PCs would go to zero. Figured that the IT outsourcing business alone was worth the entire stock price at that time and on a breakup value this would be a $45 stock. Still sees plenty of upside here.

This is for a value investor, he is not and likes to see more evidence. Wait for a turn in the numbers. Prefers semiconductors such as MU-O.

This has been a complete turnaround story. Trading at 6X forward earnings. They really need to show execution. There is limited revenue growth, limited sales growth and they are trying to chop expenses of the bottom line. He questions if they really change themselves from a traditional hardware business, which is under a lot of pressure, to something that looks more like a software business. Software is only about 5% of revenue and it is going to be very difficult for them to turn this ship around.

(A Top Pick September 12/12. Up 28.26%.) Sold his holdings. Trading at 6X earnings and has a 2.5% yield.

(A Top Pick June 18/12. Up 20.45%.) After he bought, it fell quite aggressively and he was stopped out. This company is massively restructuring.

(A Top Pick May 15/12. Up 16.07%.) Sold his holdings when the stock price broke down. This is really only from a risk management perspective when it went below his Stop Loss.

He sold out. 6 times earnings, 3% yield. In the process of a massive restructuring project. Can they bring down the cost structure and then spend on R&D, plus get rid of non-core products. There are headwinds – PC business is declining. The opportunity is that if they can do what they said they were going to do, the stock is certainly worth a lot more. They have some very good businesses.

Thinks the big rebound was just a technical rebound after its big slide to the downside. Part of it was yield based as well. Feels the company is still struggling. A somewhat dysfunctional board. Had management issues with a stream of CEO’s over the last several years. Better places to be.

Very leverage in PCs and printers. A well worn story of missteps. Have 3 big problems with the biggest one being the board. Also, have a lot of debt from doing acquisitions. The 3^rd problem is that printers and PCs businesses are stagnating and probably in decline.

(Market Call Minute.) Forget about this. You just don’t know what is going on with these things sometimes.

Shares got annihilated because of horrendous management decisions over the last 4-5 years. Minimal net debt of only $6.5 billion but over $100 billion of revenues. Breakup value is about $45. Of their 4 divisions, Service alone is worth the share price. If they can get their margins back to half the industry average, you can get the rest of the company for free. 3.2% dividend.

Would stay away from this one. Haven’t done a good job at all, especially at the board level. Had numerous missteps. Written off billions and billions of dollars of investments. To him it is just a value trap.

Very challenged. Board has one of the worst records. They wrote off EDS. There are the headwinds of the slowing PC market.

It is very hard to determine if someone is cheating on financials. Bought the company as a restructuring play with undervalued assets. They made a series of poor acquisitions.