Foolish bottom line
HP has a few business lines that are declining rapidly, such as PCs, Itanium servers, and tape storage. It also has a few businesses that are declining more modestly but remain strongly profitable, most notably printers. However, outside of those areas, there are plenty of profitable growth opportunities for HP in networking, microservers, converged storage, cloud services, and software.
As these businesses become a more significant part of HP, the company will return to revenue growth (albeit modest growth). Combined with cost cuts, this should justify continued increases in the HP stock price.
The article Why Hewlett-Packard Will Keep Hitting New 52-Week Highs originally appeared on Fool.com and is written by Adam Levine-Weinberg.
Fool contributor Adam Levine-Weinberg owns shares of Hewlett-Packard. The Motley Fool recommends Salesforce. The Motley Fool owns shares of Oracle.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.