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VIDEOTicker Shock: Four Reasons Hewlett Packard Won't Crash Your Portfolio
Wednesday's top stories and stocks with potential to move.
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Asian stocks sank overnight. The Hang Seng and the Nikkei were down 1.73% and 0.79%, respectively. Meanwhile, European stocks were in negative territory earlier this morning, too. And here in the US, we're currently trading lower.
Here’s what I’m focused on this fine hump day:
Hewlett Packard (HPQ):
Excluding items, the California-based computer giant turned in $0.91 in its third quarter. That was a penny better than expected. Meanwhile, it beat on the top line, too. And excluding items, it’s looking for $1.12 a share in its fourth quarter, which isn’t too shabby because the estimate I’m seeing is $1.07.My thoughts:
1. In spite of the beat and upbeat fourth-quarter guidance, my feel is that the Street was left a little bit wanting. I know I was. And if I had to bank on a direction in today’s session, it would probably be down.
2. But the thing is, this company still intrigues me in a big way: It has an awesome reputation, Hurd is a very bright guy, and it trades at a tempting 11.7 times this year’s estimate. What's not to like?
3. If there's a sell-off, I’d look at it as more of an opportunity.
4. Don’t forget the insider buy back in May. Although the stock is up since, that was a really good sign.
TJX Companies (TJX):
This company deserves some kudos for putting up $0.61 in the second quarter -- a penny more than analysts were expecting. Meanwhile, its revenue line seemed pretty consistent with what the Street had been looking for.Some thoughts:
1. At about 14.5 times this year’s estimate, it's attractive. But given the choice, I’d probably pick up some Target (TGT) instead.
2. I don’t hear too many people talking about it, but this line in the release caught my eye: “During the second quarter, the Company spent a total of $194 million in repurchases of TJX stock, retiring 6.4 million shares.” That seems like a lot of money spent, which it wouldn't have done unless it saw it as a decent value.
3. No matter how you slice it, its merchandise and prices are going to be popular in the near-term because consumers will continue holding onto their money like grim death.
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