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Don Dion
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Don Dion (, @DRDInvestments) is the owner and Chief Investment Officer of DRD Investments, LLC, based in Naples, FL. and Williamstown, MA., a family office focused on managing a long/short hedge fund, real estate assets, venture capital, and various other financial assets for... More
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  • Hewlett-Packard.: Time To Buy

    The purpose of the Hewlett-Packard split was to free the HP Enterprise (NYSE:HPE) business lines from HP Inc (NYSE:HPQ) that houses its printer and PC businesses. The separation was expected to have a larger growth window from the PC and printer supplies business, previously viewed as dormant. However, current growth prospects are now pushing against initial expectations. HPQ has a strong business base, and it announced a dividend of 12.4 cents per share. HPQ has noteworthy marketing capabilities, a strong brand, and some outstanding growth prospects in new markets like 3-D printing.

    The New Enterprise Services Company

    Hewlett Packard Enterprise was designed to serve the lucrative small and medium sized business market with end-to-end business tools and systems. Custom designed enterprise systems can help SMB's move quickly into new projects and markets. HPE provides software, servers, and container technology to put applications and libraries at the fingertips of the users. Combined with cloud services, container technology offers agile systems that businesses can use easily.

    Working in partnership with Docker, HPE will move to the cutting edge of both cloud services and advanced hardware.

    Contrasting Stock Performances

    The surprise aftermath of the split has been the flat performance of the Hewlett-Packard Enterprise stock and the rise of HPQ.

    (click to enlarge)


    HPE announced a lower dividend at five cent per share. The stock trades at $14.32; with a small sample size, HPQ trades at $12.50 (11.30.2015).

    HPQ's Cash Matters, Strong Ratings

    HPQ stock has done better than expected since the split. The market has embraced HPQ, because it has a reliable cash flow from the lucrative printer business. While the PC and printer business may not be on the rise as it once was, it will not fade away overnight. Millions of customers have technology investments in equipment that requires replacement supplies.

    In addition, HPQ has a four-star Morningstar rating. The annual yield of 5.4 percent is attractive, and while not the highest, it is a satisfying balance for the investor.

    Conclusion: HPQ A Solid Buy

    We were previously negative on the larger Hewlett Packard's exit from the public cloud marketplace, simultaneous with the rise of Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOGL).

    We continue to be negative on HPE - the enterprise business - given the huge competition outlined previously; however, we are cautiously optimistic on HPQ's more concrete business and see this as a solid buying opportunity.

    Nov 30 3:48 PM | Link | Comment!
  • This BABY Is Rockin'

    Natus Medical Incorporated (NASDAQ:BABY), a California company supplying medical equipment and services, scored a rockin' three-year "Supply Agreement" with the Venezuelan Government worth over $232 million. Under the terms of the Supply Agreement, Natus will deliver the goods pursuant to prepayments made by the ministry of health. With this BABY bouncing so high, here's three good reasons NOT to "sell the news:"

    One: Venezuelans need this deal - and the Supply Agreement - to succeed. The well-documented need for medical products and services in Venezuela will help Natus products to reach a large audience.

    Two: Nearly $70 million in payments to Natus are due in the first quarter of 2016. BABY's recent run-up on the news may just be the beginning of a marathon of returns for investors getting in at the beginning of the three-year deal.

    Three: Earnings, earnings, earnings. Nobody puts BABY in a corner when it comes to earnings season. Natus has beat earnings estimates 4 out of the 5 last earnings seasons. For investors looking to cash in on strong earnings plays, Natus was a strong "buy" even BEFORE the $200 million dollar deal.

    Tags: BABY, Health Care
    Oct 16 1:35 PM | Link | Comment!
  • Goldman And Morgan Stanley Are Struggling To Get IPOs Priced Within Range


    • Albertson's IPO range of $23.00 $26.00 may get moved down.
    • First Data IPO range of $18 to $20 may get moved down.

    The buy side is not buying the Wall Street underwriters price range on these two IPOs.

    We expect the prices to be adjusted down before the pricing tomorrow night.

    Stay tuned. At much lower prices the IPOs may become attractive like PMTS became last Friday.

    Tags: ABS, FDC, IPO
    Oct 14 7:37 AM | Link | Comment!
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