Analysis Hewlett-Packard shares fell to create bargain buying opportunity

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Lead: President of the U.S. asset management company Peridot Chad Brand (Chad Brand) on Wednesday U.S. investment site SeekingAlpha, wrote, HP shares fell Wednesday as investors bought bargain-hunting to create a new into opportunity.

HP's current stock price corresponds to 8 times earnings this year, the company is still a technology giant, annual cash flow of up to 120 billion dollars. With careful allocation of capital and 5% of the sales growth, the downside is very limited. With a huge cash flow, the company usually carried out the first stock repurchase (repo fiscal 2010 11 billion U.S. dollars), followed by mergers and acquisitions, and then it is less than 1% of the small dividend, but this proportion will in future increased.

take into account the weakness in the stock price (market value of only 94 billion U.S. dollars), the Unit will have a higher probability of large, rather than as they are now shown as full of risk. Price-earnings ratio is unlikely because less than 8 times, so even zero growth performance, it is not possible the number of fall. More likely is that HP's sales growth to reach at least the growth rate of global GDP, while profit growth will be faster. Thanks to the huge cash flow, the company may increase the acquisition of the stock repurchase or intensity. Indeed, the current market mood is very low, and the company's overall direction is not clear enough, but the current stock has digested all the negative factors. (Seasonal)

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the 2011 forecast earnings per share guidance only and analysts on average expected $ 5.24 flat (Hewlett-Packard in the past will increase cautious forecast guidance), but failed to meet revenue expectations, resulting in stock today intraday plunge 11% to $ 42.57 minimum touch. In my opinion, Wall Street once again lack of confidence in the new CEO over-react. After all, he just took a few months, but has not been announced in the future strategy (scheduled for a new strategy released March 14.)

for investors concerned about the HP, déjà vu Wednesday's stock prices. HP CEO Mark Hurd before (Mark Hurd) left last August led investors to sell substantially after the first time I wrote an article about Hewlett-Packard. The stock was from a high of more than 40 U.S. dollars fell to $ 38. I thought then that investors overreact. Six months later, HP is still to win the approval of Wall Street struggled. SAP has led investors to the new CEO has not dispelled concern. Although the stock has gone from 38 in August last year, rising U.S. dollar to 48 dollars yesterday, but the company has new leadership took office after the first quarter results failed to surprise people.