HP: Enjoy An Even Better Deal Than Warren Buffett

Aug. 29, 2022 10:26 AM ETHP Inc. (HPQ) StockHPQ11 Comments
Cavenagh Research
9.44K Followers

Summary

  • Buying HP stock offers investors exposure to steady revenue growth and value accumulation.
  • Trading at one year forward GAAP P/E of less than x8 and a greater than 3% dividend yield, HPQ stock is dirt cheap.
  • Notably, according to data compiled by Seeking Alpha, HP stock trades 50% - 80% cheaper than peers.
  • Personally, I use a residual earnings model to value HP and calculate about 50% upside. My target price is $47.51/share.
  • Since Warren Buffett bought HPQ in April, the stock has derated by about -20%.

HP World Headquarters

wellesenterprises

Thesis

Warren Buffett bought $4.2 billion worth of HP (NYSE:HPQ) equity in April 2022, when the stock was trading at about $40/share. Since then, the stock has derated by about -20% and investors who follow Warren Buffett's lead with a lag could

This article was written by

9.44K Followers
Experience as an investment analyst for a major BB-Bank, as well as private equity consultant for MBB. Currently working towards the CFA charter, having completed I&II. Passion for risk-assets (Growth, Contrarian, Emerging Market) ex-colleague and close friend of Investor Express

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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