Skip to main content

HP: Key on Fundamentals

Investors should keep close tabs on the company's fundamentals in its conference call today.
  • Author:
  • Publish date:

NEW YORK (TheStreet) -- Formerly lauded as the individual responsible for turning Hewlett-Packard (HPQ) - Get HP Inc. Report around upon taking the CEO reigns from Carly Fiorina, Mark Hurd's name has been battered by the media in light of a devastating sexual harassment fiasco.

Now that he has stepped down, there is little doubt that droves of interested market commentators and angry HP shareholders will have their ears glued to the company's conference call this afternoon in hopes of gaining answers and insight as to how the company will adjust to cope in a post-Hurd era.

The negative media circus surrounding the disgraced CEO is exciting and headline drawing, but I am worried that it is clouding the bigger picture and placing a lot of added pressure on the performance of this otherwise solid company.

While in the near future HP could be in for a rocky ride as adjustments are made to management and the media storm continues to rage, I am confident that HP will not be heading for the exits any time soon. Rather, looking to the medium term, I am optimistic about this company's prospects and expect that it will see strength.

After the markets close today the conference call will certainly be the spotlight event. However, investors will also have the chance to see how the company fared during the previous three months with the release of its quarterly earnings statement. As a long term focused money manager, this is what I am most interested in.

If last quarter is any indication of what is in store for HP this time around, the firm may be set to see some nice gains. In its report, the tech giant surprised analysts to the upside, reporting strong increases in both revenue and profits. Additionally, HP offered bullish guidance for the future.

HP benefits from a strong fundamental picture which includes a low P/E ratio, strong growth prospects and a solid board.

For ETF investors, the best way to gain exposure to Hewlett-Packard is through either the

iShares Dow Jones U.S. Technology Sector Index Fund

(IWY) - Get iShares Russell Top 200 Growth ETF Report

or the

iShares S&P North American Technology Sector Index Fund

(IGM) - Get iShares Expanded Tech Sector ETF Report

. In both cases, nearly 5% of the total portfolio is set aside for HP, placing it within their top 10 holdings.

IYW's index, the Dow Jones U.S. Technology Index, reads off as a who's who in the technology industry with A-listers firms including


Scroll to Continue

TheStreet Recommends

(AAPL) - Get Apple Inc. Report



(MSFT) - Get Microsoft Corporation Report



(IBM) - Get International Business Machines Corporation Report



(CSCO) - Get Cisco Systems Inc. Report

, and


(GOOG) - Get Alphabet Inc. Report

commanding the top positions. In total, the fund's top 10 holdings represent 65% of the fund's assets.

Tweaked slightly, IGM's portfolio contains nearly all of the same companies among its top positions. In total, IGM's top 10 positions represent only 55% of the fund making it a somewhat less top heavy alternative to IYW. Either fund is sufficient for gaining access to top name tech companies including HP.

Rather than writing off HP for the sins of its recently resigned chief executive, investors should keep their focus on the technology goliath's fundamental picture. It has taken its knocks but beyond this current controversy, this firm still has plenty of fuel left in the tank. Investors have a great chance to gain exposure to this firm on the cheap via an exchange-traded fund such as IYW or IGM.

-- Written by Don Dion in Williamstown, Mass.

Readers Also Like:

>>10 Highest-Rated Dow Dividend Stocks

At the time of publication, Dion Money Management was not any of the equities mentioned.

Don Dion is president and founder of

Dion Money Management

, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.