At the beginning of the year, I selected HP to be one of my best 2014 dividend stocks. Not long afterwards, I added HP to my portfolio. The company shows great metrics and meets all my minimum requirements in terms of revenue, EPS and dividend growth over the past 3 and 5 years.
This year’s quarterly results continue to show strong growth and the future of the company looks bright. While the past two quarters were slightly under analysts’ expectations, Q2 was a record period for the company.
However, the stock is on a major downtrend for the past two months. It seems HP isn’t in investors good grace anymore but I can’t really see why.
So here’s my question; why do you think HP is down lately? Is it a great buying opportunity or am I missing something?
I’m looking forward to reading your answers!
disclaimer: I hold HP in my portfolio and it is also part of some of our DividendStocksRock portfolios
You said it yourself, slowing earnings. They are not a growth company. You can’t grow revenue on profits from ink cartridges. I don’t know about anyone else, but I’m never going to by another HP printer as long as I live.
Hello Auzzieyank – not HP the computer company, Helmerich & Payne, the drilling company!
It’s market related. Looking at related oil drilling stocks, everyone took a hit during that timeframe.
Dividend Guy…
I believe you probably invested in this company solely based on your analysis of the company’s fundamentals. While I use fundamentals to determine which companies are worth investing in, I tend to use technical analysis to determing the best timing for getting into and out of stocks. Technical analysis would have told you that the stock was overbought and to wait to get in. Looking at a chart now it appears that the best time to have gotten in was just below 100. Assuming you got in there I would look for the stock to rebound to around 110 within the next year. I know this is not what you probably want to hear but HP really is a great company. Unfortunately great companies can be over priced at times. I wish you the best.
Dennis McCain
My analysis of HP is giving a great score at the current price of $102, not so great at $118.
Only explanation I got is that the expectation portion of the price at $118 was simply to great. .
Share price double in a year and some people were under the impression that it will continue like that. When they realized that it is not the case the expected future value for the share reduced, putting pressure on the price.
However, it is right now a good buy per my standard and qualified for the 7.1% total return per year for the next 6 years.
Hello Dennis,
Thx for your input, I’ve never given much interest in technical analysis. I didn’t find the P/E too high (then again, fundamental analysis). I don’t really mind as I’m keeping it for the long haul.
Hey Hemgi,
there is definitely some profit taking in this graph. But the stock will go back up 🙂