Xerox Corporation (XRX): This Forgotten And Undervalued Tech Giant Could Climb 30%

Page 1 of 2

Sometimes, the best advertising a company can hope for is nothing it could ever actually create for itself. Rather, the most potent marketing tool in the world is inspiring consumers to use that company’s name as a verb — one that is synonymous with what that company does.

For example, Google Inc (NASDAQ:GOOG) knew it had made it when people started to say “Google it” as a succinct way of referring to a Web search.

But every now and then, your company’s name becoming shorthand for a routine function can turn against you.

Xerox Corporation (NYSE:XRX)

Case in point: Xerox Corporation (NYSE:XRX). Back in the 1980s, before computers were common (or crucial) in corporate offices, photocopiers were the centerpiece of recording and sharing company information. That’s when the phrase “Xerox it” surfaced, slang for the act of photocopying.

The advents of PCs and cloud storage have significantly quelled the need for high-end photocopiers, and Xerox Corporation (NYSE:XRX) has fallen from relevancy. Investors have also noticed the demise of Xerox’s stature, dismissing the company as yesteryear’s investment.

That’s a mistake. Xerox Corporation (NYSE:XRX) has done a poor job of telling its story, but the company is far more relevant — and profitable — than the market is giving it credit for.

The New And Improved Xerox
Think Xerox is just a photocopier manufacturer? Guess again.

Mass-transit ticketing systems, digital printing presses, packaging printers, wide-format scanners and digital document management systems are all part of Xerox Corporation (NYSE:XRX)’s current (and relevant) menu of products. Xerox still makes photocopiers and personal printers, too, but those products are now a minority part of its business mix. Most of Xerox’s top line is now driven by services.

In the first quarter of this year, Xerox Corporation (NYSE:XRX) generated $2.92 billion in service sales. That’s 55% of the total revenue mix, up from 51% in the first quarter of 2012. Conversely, product sales and leasing revenue fell to $2.14 billion, or 40% of the company’s top line for the first quarter. That’s down from 43% in the first quarter of 2012.

A pessimist could note that last quarter’s total sales fell 3% on a year-over-year basis, or that revenue was down nearly 1% last year, to $22.4 million. Neither point paints a particularly encouraging picture. But what the numbers alone don’t explain is that Xerox has only recently made its full foray into digital document management and related services.

Take the company’s e-discovery business line as an example. The acquisition of Lateral Data last year greatly expanded Xerox Corporation (NYSE:XRX)’s capabilities in the e-discovery industry — a rapidly growing arena for the legal industry. E-discovery gives law firms the tools and framework needed to manage and share the massive amounts of digital data often used in today’s court cases. The e-discovery service and software market is projected by some to be worth $9.8 billion by 2017, up 96% from last year.

In early June, Xerox acquired e-learning outfit LearnSomething, which serves the pharmaceutical and packaged goods industry. LearnSomething’s software quickly and efficiently delivers information to remote workers. But, under the care of Xerox Corporation (NYSE:XRX), LearnSomething could become a much more potent tool.

And Xerox has many more new revenue-bearing tools on the way, if not already under its umbrella.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!