Xerox (XRX) has transitioned from being a technology manufacturing firm into a document management firm -- a subtle change but also an important one. While high-end office printers still make up a major chunk of revenues, professional services now also contribute a material portion of sales, a sign that the firm is willing to embrace new trends in the industry and avoid commoditized parts of the business.
Black-and-white printing is one area that's become commoditized in the last few years. Print quality has essentially become the same across most major black and white laser printer manufacturers, so Xerox has taken its resources from black and white printing tech and moved it over to areas where its R&D can actually build a better mousetrap. Niche solutions such as color printing and digital production presses are the areas where the firm's product unit is focusing its attention instead.At the same time, services are becoming a much more important part of Xerox's business. Servicing printers historically generates more revenues than the printer's original cost, a fact that provides XRX with sticky recurring revenues. Higher-end professional services, such as document outsourcing, are becoming a more important part of XRX's sales as well. With rising analyst sentiment in shares this week, we're betting on Xerox. Also betting on Xeros, as of the most recently reported period, is David Einhorn's Greenlight Capital. The stock also shows up in Ray Dalio's Bridgewater Associates portfolio.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV