Has Hewlett-Packard Company (HPQ) Become the Perfect Stock?

But HP is trying to make progress. By seeking to work with Google Inc (NASDAQ:GOOG) to release Android-operated devices, HP is trying to use Google’s strength in mobile as a way to bootstrap its struggling prospects. Google will also clearly benefit from HP’s decision to abandon Microsoft Corporation (NASDAQ:MSFT) and its Windows platform, which HP has relied on for years in its PC sales. Even with its woes, HP is a big enough player for the move to be meaningful for both Google and Microsoft.

Last Thursday night, Hewlett posted its most recent quarterly results, and the stock exploded higher by 12% the next day. It’s evident that CEO Meg Whitman’s attempts to cut costs have started to bear fruit, as the company’s bottom-line guidance was much higher than analysts were expecting. HP still has a lot further to go, but if optimistic guidance for the future proves correct, the shares are so cheap that there’s a lot more upside available for shareholders.

HP will find it hard to improve its score by these measures, as margins are hard to come by in the business, and its balance sheet needs time before it will heal. Still, value investors may find it a promising speculative play on a possible turnaround.

The article Has Hewlett-Packard Become the Perfect Stock? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Google and owns shares of Google and Microsoft.

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