4-Star Stocks Poised to Pop: Xerox

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, copier maker and business services provider Xerox (NYSE: XRX  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Xerox's business and see what CAPS investors are saying about the stock right now.

Xerox facts

Headquarters (founded) Norwalk, Conn. (1906)
Market Cap $10.0 billion
Industry Office electronics
Trailing-12-Month Revenue $22.6 billion
Management Chairman/CEO Ursula Burns CFO Luca Maestri
Return on Equity (average, past 3 years) 8%
Cash/Debt $814.0 million / $9.2 billion
Dividend Yield 2.3%
Competitors Accenture
Canon

Hewlett-Packard

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 88% of the 620 members who have rated Xerox believe the stock will outperform the S&P 500 going forward.

A couple of months ago, one of those Fools, All-Star fcfroic, offered a balanced take on the opportunity:

This is not your Dad's [Xerox]. The business has become a services business with a high level of recurring revenue. The technology business, the moniker applied to the legacy copier business is subject to considerable Euro exposure and foreign currency translation issues, its operating margins [expanded sequentially] in the most recent quarter despite the revenue shortfall. Most of the debt funds the leasing of office equipment.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Xerox may not be your top choice.

If that's the case, we've compiled a special free report for investors called "The 3 Dow Stocks Dividend Investors Need," which uncovers a few other juicy income opportunities. The report is 100% free, but it won't be around forever, so click here to access it now.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Accenture. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 14, 2012, at 8:09 AM, havvey wrote:

    This has to go up it is down so low it has to look up to see bottum!!!

  • Report this Comment On September 14, 2012, at 12:03 PM, garifolle wrote:

    And considering the absurd rally of the last 2 days, this is one of the rare stocks that is not overbought.

    The stock will profit from lower interest rates, and should not suffer too much of too high commodities prices.

    It should also not be too affected when the markets open their eyes on the real situation of the economy, and might profit from a short squeeze.

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