Trade-Ideas: Hewlett-Packard (HPQ) Is Today's Pre-Market Laggard Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Hewlett-Packard ( HPQ) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Hewlett-Packard as such a stock due to the following factors:

  • HPQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $373.9 million.
  • HPQ traded 39,371 shares today in the pre-market hours as of 7:57 AM.
  • HPQ is down 2% today from yesterday's close.

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More details on HPQ:

Hewlett-Packard Company and its subsidiaries provide products, technologies, software, solutions, and services to individual consumers, small-and medium-sized businesses (SMBs), and large enterprises, including customers in the government, health, and education sectors worldwide. The stock currently has a dividend yield of 2.2%. Currently there are 4 analysts that rate Hewlett-Packard a buy, 5 analysts rate it a sell, and 14 rate it a hold.

The average volume for Hewlett-Packard has been 17.5 million shares per day over the past 30 days. Hewlett-Packard has a market cap of $51.0 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.66 and a short float of 2.4% with 3.14 days to cover. Shares are up 84.6% year to date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Hewlett-Packard as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, HPQ's share price has jumped by 33.97%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Net operating cash flow has increased to $3,556.00 million or 43.79% when compared to the same quarter last year. In addition, HEWLETT-PACKARD CO has also vastly surpassed the industry average cash flow growth rate of -11.21%.
  • HPQ, with its decline in revenue, underperformed when compared the industry average of 10.3%. Since the same quarter one year prior, revenues fell by 10.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio of 1.14 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, HPQ has a quick ratio of 0.70, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, HEWLETT-PACKARD CO's return on equity significantly trails that of both the industry average and the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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