Hewlett-Packard Company (HPQ) Shares Seem Cheap as the Company Reboots

Should the shares continue to be discounted?
HP is already beginning to make some progress in key areas. Plus, the company has improved its balance sheet, which is now generating as much as $4.1 billion in operating cash flow. And when you consider the fact that the company reported decent fourth-quarter earnings, which included a beat on EPS and in-line revenue, there’s very little risk in these shares. And investors have to be encouraged by the company’s willingness to (at least) explore an operating system beyond Windows.

Although HP has yet to confirm this to be true, this is the type of outside-the-box thinking that will help Whitman turn things around. Granted, there’s now a focus on margin and profitability. But it’s going to take more than conservatism to get investors to believe. The company must beat or at least be on par with rivals in hardware design and engineering. It’s going to cost money, which HP has plenty of. For investors, there are no surprises going forward. If there are, it’s all to the upside.

The article HP Shares Seem Cheap as the Company Reboots originally appeared on Fool.com and is written by Richard Saintvilus.

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

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