HP Inc.: Patiently Build A Position

Jul. 22, 2022 9:29 AM ETHP Inc. (HPQ) StockHPQ4 Comments
Prasanna Rajagopal
1.13K Followers

Summary

  • Demand for HP's products is deteriorating.
  • Pull forward in demand and operating leverage helped deliver a high watermark in operating cash flow in 2021.
  • Build a tiny position on any near-term weakness, but wait to build a substantial one after the Q3 earnings.
  • Warren Buffett and the massive buybacks may be putting a floor on the stock price.

Windows 8.1 on HP Pavilion Ultrabook

manaemedia/iStock Editorial via Getty Images

HP Inc. (NYSE:HPQ) operates in a cyclical business but generates a lot of cash. The management is returning vast amounts of cash to shareholders via buybacks. The company saw a pull forward in demand in 2020

This article was written by

1.13K Followers
Prasanna Rajagopal comes with in-depth knowledge of the technology industry, having spent over 15 years in various sectors of the software industry. Prasanna loves to learn and write about business and investment opportunities in technology, media, retail, and industrial companies. Prasanna has a M.B.A. from UCLA Anderson School of Management, a M.S. in Industrial Engineering from Wichita State University and a Bachelor's degree in Mechanical Engineering from University of Madras.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of VOO, VGT, T, ENR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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