originally published at my blog
Today Jim Chanos came out on CNBC TV and highlighted to the world the declining Cash Flow at Hewlett-Packard.
Below are two charts of HPQ's quarterly operating cash flow statistics showing their recent declines.
click to HPQ Stockdiagnostics 20 quarter OPS chart
click to HPQ Stockdiagnostics 20 quarter FCF chart
click to HPQ Stockdiagnostics Long Term OPS & FCF Growth Tables
Chanos from CNBC transcript in video link:
"those acquisitions have enabled them to maintain a revenue base and see a declining cash flow base. those are maintenance capital expenditures or maintenance r & d hidden as acquisitions. and when you value the company, when you begin to look at the fact that this company has purchased its r & d, capitalized it, if you will, r & d is normally expensed, you begin to see a totally different picture. look at the middle of the left table which shows you that the free cash flow four buybacks and dividends, but after cap and acquisitions a much different animal and has turned negative. in addition, the balance sheet has been destroyed here. all right"
A look at today's morning posts at Equities Research with recent Stockdiagnostics Downgrades.
|company||ticker||date||Downgrade||$ Close||Time||% Return|
|Houston American Energy||HUSA||5/23/2011||$17.25||$1.06||14m||94%|
|First Solar, Inc.||FSLR||5/10/2011||$128.51||$14.46||14m||89%|
|STR Holdings, Inc.||STRI||5/10/2011||$16.35||$4.15||14m||75%|
|Research In Motion||RIMM||9/26/2011||$21.68||$6.92||10m||68%|
|Scientific Learning Corp.||SCIL||3/16/2011||$3.00||$1.05||16m||65%|
|Image Sensing Systems||ISNS||4/4/2011||$13.50||$5.25||16M||61%|
|Arcelor Mittal NY Registry||MT||5/16/2011||$31.92||$15.06||14m||53%|
|Titanium Metal Corporation||TIE||5/13/2011||$18.86||$11.09||14m||41%|