Post-Market Laggard: Hewlett-Packard (HPQ)

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 post-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 $283.2 million.
  • HPQ is down 4.3% today from today's close.

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More details on HPQ:

Hewlett-Packard Company, together with its subsidiaries, provides 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 1.7%. HPQ has a PE ratio of 14.0. Currently there are 9 analysts that rate Hewlett-Packard a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Hewlett-Packard has been 11.5 million shares per day over the past 30 days. Hewlett-Packard has a market cap of $69.5 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.27 and a short float of 1.4% with 3.41 days to cover. Shares are up 34% year-to-date as of the close of trading on Monday.

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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, revenue growth and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, HPQ's share price has jumped by 48.07%, 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.
  • HPQ's revenue growth trails the industry average of 13.7%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market on the basis of return on equity, HEWLETT-PACKARD CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for HEWLETT-PACKARD CO is currently lower than what is desirable, coming in at 27.22%. Regardless of HPQ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, HPQ's net profit margin of 3.57% is significantly lower than the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 29.1% when compared to the same quarter one year ago, falling from $1,390.00 million to $985.00 million.

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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