Market Currents
"The content that was once printed for distribution or portability is now simply being...
-
Monday, August 6, 2012, 6:30 PM ET"The content that was once printed for distribution or portability is now simply being distributed or shared electronically," writes Deutsche's Chris Whitmore, summing up the long-term threat the printing industry is staring at. Whitmore estimates top vendors, including H-P (HPQ), Lexmark (LXK), and Xerox (XRX), have seen their sales fall at a 6% annual clip over the last 10 quarters. The depressed valuations assigned to the group show Whitmore is far from alone in being this pessimistic.
Other date
TECH ETFs IN FOCUS
Latest Tech Articles
This news story has 11 comments:
the slow down. Exports have been the saving grace - so far. As the
rest of the world catches up electronically the demand for paper will continue to fall.
Their service division is serving giants like Dept of Defense,Dept. of Justice,giants like Boeing,most of the major law firms of the nation and they are leasing the best color equipment in the industry......
They perform multi support services to these clients.But the best story is their recent acquisition (ACS, 6 billion service company) serving Easypass for multi states and Department of Motor Vehicle for about 17 states, parking control in the UK and other states in this country...Payment and control of states health services...Imaging of medical records for rapid distribution to doctors and hospitals....These contracts are almost always renewed because XRX serves their customers very well...
XRX is a BUY................
In addition, they disclosed that there was a higher than normal channel inventory of printing supplies about nine months ago, and that this channel inventory just recently got back to normal levels (implying at least some pick up of supplies revenue going forward). I will be very interested to see printing supplies revenues when they release earnings in a couple of weeks.
Finally, as an anecdote, I recently went to Best Buy, and noticed a huge number of HP inkjet printers in stock. I didn't physically count them, but there must have been 300+ printers of various models (Officejets, etc.) in a single store. It would be hasty to jump to conclusions, but it kind of looked like channel stuffing to me (note the quarter just ended about a week ago). In any case, we'll see how this plays out over time.
Long HPQ.
I'm long HP since the beginning of the year, but there is a lot more housecleaning to be done at HP. I see the head of enterprise services is leaving for "other opportunities". Bout freakin time. Lesjak needs to go too. Company needs a whole new mindset in the Finance Dept.
MW has stated that there will be no more big M&A. Her strategy will be smaller tuck-ins combined with enhanced internal R&D (and also restructuring of their current operations of course).
I don't normally invest in tech companies, but I like the diversity of their operations. Also, I like MW, and think she has a shot at doing something really special here.