Why Hewlett-Packard Is Poised to Underperform

Market-lagging returns could be written in this 2-Star.

Brian D. Pacampara, CFA
Brian D. Pacampara, CFA
Feb 25, 2013 at 9:00PM
Technology and Telecom

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

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

Hewlett-Packard facts

Headquarters (founded)

Palo Alto, Calif. (1939)

Market Cap

$37.4 billion

Industry

Computer hardware

Trailing-12-Month Revenue

$120.4 billion

Management

CEO Margaret Whitman (since 2011)

CFO Catherine Lesjak (since 2007)

Return on Equity (average, past 3 years)

(1.5%)

Cash/Debt

$11.3 billion / $28.4 billion

Dividend Yield

3.2%

Competitors

Accenture

Dell

IBM

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

On CAPS, 10% of the 3,833 members who have rated Hewlett-Packard believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, sikiliza, succinctly summed up the Hewlett-Packard bear case for our community:

I just don't believe that Whitman will be able to save this behemoth from itself. They were caught napping, have had a ten year streak of awful decision-making and leadership and their products are not really that desirable anymore. It takes a long time to turn around an aircraft carrier and even longer to turn around one that is damaged.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.