Hewlett-Packard Stock Gets More Attractive as It Falls

NEW YORK (The Street) -- Hewlett-Packard (HPQ), the world's second-largest personal computer vendor by revenue, didn't report breathtaking earnings results last week, but with optimism surrounding its upcoming business segment separation, the tech giant did more than enough to remind investors how cheaply Hewlett-Packard stock is trading today.

Shares added 2.75% Friday, closing last week at $34.76. But even with the modest gain, H-P's stock is still down more than 13% year-to-date, shedding almost 7% of its value in the past six months. And this doesn't make sense -- not at a time when the company is poised to create value and become more focused by splitting into two independent and publicly-traded companies.

The slow-moving personal computing and printing operations -- to be called HP Inc. -- will trade under the current ticker HPQ, and will be lead by Australian native Dion Weiser.

H-P's chief executive Meg Whitman will lead Hewlett-Packard Enterprise, which will trade under new ticker HPE. This business will encompass areas like networking, industrial-grade computing and the $23 billion Enterprise Services division.

So buying the stock today really comes down to one simple question: is H-P in worse shape now than it was in January when the stock traded in the $40s? The answer is no. So for current shareholders, if you liked HPQ stock at $40, you should love the shares even more now at $34.

Not to mention, when considering its price-to-earnings ratio of 13, which is eight points lower than the S&P 500. This suggests growth expectations for H-P are low.

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