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Does Hewlett Packard Have Cisco Worried?


HP is a great company, with or without 3Com.

Because I've been feeling a little under the weather, yesterday morning I bought a 64-ounce bottle of cranberry juice. Much to the dismay (and possibly, awe) of my co-workers, I drank the entire thing in about three hours' time. My goal was to shake my head cold. The good news is, it worked, but if I never drink another glass of cranberry juice again, it will be fine by me.

Asian stocks took a breather overnight. The Hang Seng and the Nikkei were off 1.01% and 0.68%, respectively. European stocks, however, were up a smidge early this morning. And here in the US, we're currently trading higher.

Here's what I'm seeing today:

Hewlett Packard (HPQ):
I guess Hewlett loves 3Com (COMS).

My take on the news:

1. If I were Cisco (CSCO) I wouldn't be forming beads of sweat just yet, but I'd probably grab a paper towel for the future.

2. With regard to Hewlett Packard, I like this company with or without 3Com. Besides its stupendous name and excellent earnings prospects down the line, it's also trading near its 52-week high, and in the ballpark of 11.7 times the 2010 estimate.

3. Keep in mind that while I think that sidling up to 3Com may end up being a terrific idea and one that generates lots of flash, any time a company plunks down a few billion dollars to make a deal, there's risk.

Las Vegas Sands (LVS):
Is Las Vegas Sands going to roll the dice?

There's chatter out there that the company could step on the gas and start building in Macau, which during the economic boom, was considered a big-time destination for gamblers of many stripes.

My take:

1. If the chatter is accurate, it could be a very good sign. I don't think it's something the company would even consider unless it thought the overall picture would brighten, and unless it thought it would have the flash to do it.

2. To the company's credit, the stock has been hot, and fighting a trend is something I'm not keen on doing. At the same time, I just can't help but think that investors have been a little too excited about gaming and a little too bullish on Las Vegas Sands' stock in general. Even if the company were to turn in double what analysts are figuring on for 2010 (the current estimate is $0.35), I still wouldn't be jumping for joy.

For my last take on the company, see Las Vegas Sands Is Not an Oasis Yet.
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No positions in stocks mentioned.

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