I don’t wish to dwell on politics too much regarding the US government shut down that’s going on (that’s not really what my blog is about) but it’s interesting today what the Bloomberg website is reporting. Apparently there could be a housing crisis due to the latest developments, as the mortgage approval process will slow down. As a person looking to become a first time buyer myself this is potentially quite a worrying scenario. Check out the article on Bloomberg and tell me what you think about this latest news – will keep an eye on the Wall Street Journal as well to see what they have to say. I’ll put together some in-depth analysis soon once I’ve had more time to construct my thoughts around it.
The following blog post was originally posted on the internal intranet as part of one of my college assignments. That intranet project has long gone so I thought I would re-purpose some of that content on this blog. The news in this post is about a year old now, but I still believe it has some value. Most of all it’s just some examples of how I can write journalistic pieces about the current state of the stock market. Hope you enjoy it.
Meg Whitman was appointed CEO of Hewlett-Packard (NYSE: HPQ) a year ago and her remarks at the company’s recent analyst day saw the stock decline from $17.13 to $15.94. HP has suffered a tremendous loss in market cap with its efforts in research and development and its lack of product focus being highlighted as big problems by Whitman. HP’s CEO is ready to embrace change to transform the Palo Alto, CA based firm.
Growth at HP has been poor while industry leaders such as Google (NASDAQ: GOOG) and Apple (NASDAQ: AAPL) have raced ahead.
Still, the firm’s financials appear to be fairly sound and the annual dividend of $0.52 is sustainable. It is a high dividend yield relative to industry leaders. Furthermore, the EPS is $2.98 which is much higher than its EPS from a decade ago of $0.83.
HP has made a lot of acquisitions recently and this has resulted in $20 billion in net debt. The enterprise software company Autonomy and Electronic Data Systems are some of the acquisitions. These are important takeovers as the enterprise software market could be the golden egg for HP as it is projected to be worth $15 billion in 3 years time.
Valuations of HP reveal promise, but it must be noted that they are based on past performance. At the same time, HP has a lot of financial flexibility.
Loss of Business
HP doesn’t have much of a presence in high growth markets such as the internet and online services with Google being the standard bearer having recently celebrated its fourteenth anniversary.
The other threat for HP is the emergence of mobile devices and tablets. HP’s ElitePad 900 has a long way to go before it can rival Apple’s iPad.
Big Data, Security and improvements in Cloud Management are the products and services HP has been focused on. However, the problem for the Palo Alto, CA based PC firm is that its competitors have a considerable advantage in the forecasted growth areas. Tech giants like International Business Machines (NYSE: IBM), Oracle Corporation (NASDAQ: ORCL) and Cisco Systems (NASDAQ: CSCO) have more capacity and better products than HP in its forecasted growth areas.
Meg Whitman has her work cut out for her at HP in the coming years. She may have even been blowing up the problems that are troubling the PC giant so that she could look good by using the old management trick of under-promising and over-delivering.
What to do with HP?
Savvy investors will find different ways to profit from HP which is in decline. It’s going to be a long time before HP recovers, if it ever does.
Day traders and swing traders may want to take note as there could be a potential short-term rebound depending on any business moves HP makes. The fundamentals signify lower earnings for 2013 and the near future. HP is not a bargain stock by any measure.
The Hulbert Interactive is an online resource that complements the Hulbert Financial Digest (HFD) which ranks advisory letters. Mark Hulbert has brought his expertise into these two MarketWatch products which are available online should you wish to subscribe. Hulbert is a well respected financial journalist who has been published in Barron’s magazine and the New York Times – many students from my Finance masters degree in Arizona often reference him – and it’s easy to see why. His Interactive product is very reliable as well as being easy to use.
Why it Works
The problem with investment newsletters is that they tend to show off their successes and play it safe by not revealing their failures. This is where the Hulbert Interactive comes in handy with its procedure of signing up for 180 investment newsletters in order to analyze them thoroughly. Stock market trading success requires timely information and this can be obtained by subscribing to the appropriate financial newsletter.
The performance review that the Hulbert Interactive offers investors covers short-term and long-term periods and is risk adjusted. The Hulbert Interactive is great for stock picks with information on which stocks the advisory letters like and which stocks are not mentioned at all. Moreover, there are detailed reasons provided for why a particular stock is part of a portfolio.
Interview Video with Mark Hulbert
Investment newsletters that have done extremely well can be filtered according to the industry or market by this MarketWatch online tool. This makes it a lot easier for investors who would have otherwise have had to sift through a lot of information that would have been very time consuming for them. Put simply, you won’t get led down any blind alleys!
It’s also worth mentioning that a Wall Street Journal Discount subscription can also help budding investors due to the sheer wealth of information available in the newspaper.
There is a lot of material that offers educational value to traders and other investors with several interesting articles on stocks, asset allocation and market timing et al. Investors will also be able to subscribe for free email alerts that gives them an update on when a newsletter either over performs or underperforms on their best stock picks. There are also alerts when a stock’s rating by an advisory letter is upgraded or downgraded.
More than anything, the MarketWatch products are reputable sources that investors can make use of at any place or time that they deem convenient with 24 hours a day online access to the Hulbert Interactive being offered for just $99. One of the plus points is that the financial newsletter rankings can be customized to suit each investor’s requirements. For example, an investor may want to see which newsletters provided superior coverage of the commodities market from November 2009 to April 2010. The Hulbert Interactive will do this for the investor and much more.
30 Day Free Trial – Definitely Worth It
As with a lot of these types of products, there is a free 30-day trial period which investors will be happy to note. Furthermore, investors don’t necessarily have to pay the full cost of the subscription as there are quite a few coupons available through third-party websites with the Wall Street Subscriptions site being one of them.
The HFD team has been kind enough to prepare a guide for the Hulbert Interactive to assist investors. Both products by Mark Hulbert offer impartial reviews and investors view them as very reliable and they have stood the test of time.
Check out the Marketwatch website to find out more about Hulbert Interactive - http://www.marketwatch.com/premium-newsletters/hulbert-interactive
Last summer I finally made it to Thailand. Whilst there I went on boat-trips, ate the local food, danced with the locals, met monkeys, and generally just had the most amazing time – whilst this might be a little off topic, I wanted to upload a few photos just to give my readers a taste of what the place is like and what I saw.
I hope to go back to Thailand next year, but will upload more photos over the next couple of weeks x