*Extra* How 'TheStreet.com' on <I>Fox</I> Could Have Helped You Avoid Xerox - TheStreet

*Extra* How 'TheStreet.com' on <I>Fox</I> Could Have Helped You Avoid Xerox

An excerpt on Xerox from the show that never aired.
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Friday used to be my favorite day. End of the week. Work at home. Kickback time with my family. Then came "TheStreet.com" on

Fox News Channel

, and there went that. Now at some point I have to come into NYC in time for the show. (Ever try driving cross town in Manhattan at rush hour?! On a Friday??!!) But traffic is the least of my worries.

Friday has gone from being my easiest day to my hardest. First, I have my regular Monday column to report and write. Then, or at some point during the day, I have to research the three stocks that will be discussed on our Stock Drill segment. This is the segment where a money manager or analyst comes on and pitches his or her three favorite stocks.

But it's not your usual biz TV stock segment, where the promoter gets off the hook. It's generally confrontational and it's quick -- six or seven minutes, tops. That means two or three minutes per stock, which leads into a couple of questions or comments from

Jim Cramer

and me, with little time for follow-ups.

Unlike Cramer, who doesn't know which stocks will be discussed until after the market closes on Friday, I receive warning. And since I'm not current on many of these stocks, I usually spend one or two hours each Friday talking to sources and reading through a pile of research reports, generally looking for the risks. What are the risks? What can go wrong?

Why bring that up now? Because today,

Xerox

(XRX) - Get Report

, citing weak domestic and foreign demand, blew up. It was a favorite of money manager Ken Schapiro on our first (and some say "lost") episode. (That's the one that was pre-empted by the

JFK Jr.

tragedy.) The point of showing the transcript (available on

TheStreet.com's

Fox

TV page) isn't to embarrass Ken, who is a heck of a smart and nice guy. It's to show that even someone that earnest can get hit by surprises, and that all was not as rosy as Wall Street's brokerage reports would have had you believe.

Without further ado...

BRENDA BUTTNER

(Moderator): Next stop, and last one:

Xerox

(XRX) - Get Report

. Best known, of course, for its copying machines. What do you like?

SCHAPIRO

: Just what you said, it's the brand. It's Xerox. It's like

Kleenex

. The shift to digital is happening. Anytime you put a digital copier in an environment, the usage goes up 30% to 40%. That's why they like...

GREENBERG

: Such an image issue. It is such an image issue. You know, people don't even know they have digital copiers. How did they get the message out?

SCHAPIRO

: You know, the interesting thing there is in the laser market, where they've gone downscale with their brand name, they've captured 15% of the market share against

Hewlett-Packard

(HWP)

, and HP's only competition in their copier market is this thing called a "mopier." What kind of name is a mopier?

GREENBERG

: Well, you still have -- you have tepid growth here. This is not a company that's growing by leaps and bounds. I mean, revenue growth is in the single digits, I think. I think their earnings growth is in the teens. The thing's trading at -- what? -- 30 times earnings?

BUTTNER

: Lots of weakness overseas as well.

SCHAPIRO

: It's 20 times next year's numbers, and it's 20 P/E. The growth overseas, the deal is there. Obviously, overseas growth is bad. Overseas growth has been bad for many companies. But when that overseas growth continues to go upside, they're going to go to the brand names. It's going to be something like a Xerox.

CRAMER

: That makes some sense to me. You know, this stock is not expensive vs. the others that we talked about.

SCHAPIRO

: No, it's a cheap stock. That's why we're buying it here.

GREENBERG

: Yes, cheap stock, and of course it can always be a cheap stock for a long time.

BUTTNER

: See, that's the thing. Can it just get cheaper? I mean, that's what you have to ask about these kinds of stocks, don't you?

CRAMER

: If it gets cheaper, you buy more of this type of stock.

BUTTNER

: Really?

CRAMER

: Yes. The Xerox. Yes, I think -- I'm on Ken's same page on this. I just was worried about Latin -- Latin America's a little weak. But I figured that after the second quarter, this could be a good time to get in.

BUTTNER

: You know, the thing that bugs me about this stock is that I didn't realize, but Xerox developed the fax machine, they developed the first personal computer. They have such problems in execution. You never think of Xerox when you think of those products.

SCHAPIRO

: Yes, the best thing is, is they actually developed the

Windows

product and

Apple

(AAPL) - Get Report

stole it and

Bill Gates

stole it from Apple.

BUTTNER

: So what does that say?

SCHAPIRO

: Well, that was Xerox the old, now we have...

CRAMER

: Those were clowns. They threw the clowns out. There are new guys.

BUTTNER

: OK.

CRAMER

: Those guys are history.

BUTTNER

: All right.

SCHAPIRO

: They stole the CFO from

IBM

(IBM) - Get Report

-- the guy's real smart.

GREENBERG

: Yes, he is a smart guy.

BUTTNER

: Guys, that's about all the time we've got.

What does Schapiro say now? Couldn't get a hold of him, but I promise that when I do, I'll pass along his comments.

Would love to chat more, but I've got this inch-high pile of papers related to tomorrow's show staring me in the face.

Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at

herb@thestreet.com. Greenberg also writes a monthly column for Fortune.

Mark Martinez assisted with the reporting of this column.