2-Star Stocks Poised to Plunge: Hewlett-Packard?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, IT products and services giant Hewlett-Packard (NYSE: HPQ  ) has received a distressing two-star ranking.

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

HP facts

Headquarters (founded) Palo Alto, Calif. (1939)
Market Cap $34.6 billion
Industry Computer hardware
Trailing-12-Month Revenue $122.5 billion
Management CEO Margaret Whitman (since 2011)
CFO Catherine Lesjak (since 2007)
Return on Equity (average, past 3 years) 9.2%
Cash/Debt $9.5 billion / $29.8 billion
Dividend Yield 2.9%
Competitors Apple

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

On CAPS, 29% of the 2,315 members who have rated HP believe the stock will underperform the S&P 500 going forward.

A few months ago, one of those Fools, All-Star NHWeston, succinctly summed up the HP bear case for our community:

This company is rudderless. ... [HP] is involved in a range of important technologies but they really aren't first-tier at any of them. Who and/or what breaks out of mediocrity, especially if the global economy remains [asthmatic]?

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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 Apple and IBM. Motley Fool newsletter services have also recommended creating a synthetic long position in IBM and a bull call spread position in Apple. The Fool owns shares of Apple. 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.

Read/Post Comments (2) | Recommend This Article (2)

Comments from our Foolish Readers

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 24, 2012, at 3:48 PM, cbglobal wrote:

    HP is either first or second in most of its business segments; and where No. 2, No 1 is IBM. So where do you get not first tier anymore?

  • Report this Comment On September 24, 2012, at 5:10 PM, giuseppe1149 wrote:


    Tell me that you had nothing to do with the headline to this article so that I could retain some semblance of respect for your writing. If you truly believe that HPQ is "poised to plunge" then how would you characterize what's happened to the stock in the past 2 years. Really????

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