Stocks in the News — Week of November 25, 2013

 

Hewlett-Packard Reports Fourth Quarter Earnings

Personal computer-maker Hewlett-Packard Co. (HPQ, $25.09) reported fourth quarter earnings after the market closed today.  Results pleased Wall Street, with sales of $29.1 billion vs. the expected $27.8 billion, and earnings per share coming in a penny higher than expected.  Sales were strong in commercial computers, servers, and networking equipment.  

Cash flow numbers, which were surprisingly good in the third quarter, came in 10% higher this quarter.  CEO Meg Whitman intends to repurchase shares and increase the dividend in 2014.

HP’s full-year earnings guidance remains unchanged, projected to fall 12% this year, followed by two flattish years.  The PE is 7.1 and the dividend yield is 2.3%.

On August 22 I said, “The stock is volatile, and likely to trade between $22 and $28 for the rest of the year.  With an extremely low valuation, a wide trading range, and the stock at support levels, traders should jump in here.”  The stock price has since risen as much as 19%.

At this point, there’s upside price resistance at $27.50, and then again at $30; with support at $24.75.  Traders are likely to continue making money with HPQ.  Growth investors should look elsewhere.

Goodfellow LLC Rating:  Trading Buy, Value, Volatile, Public.  (11/26/13)

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Happy investing!

 

Crista Huff

President

Goodfellow LLC

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