HP: Ink or Information?
March 30, 2010
I have commented about Hewlett Packard’s push into content centric activities. The deal that made me sit up and take notice was the purchase of Exstream Software for more than $1.0 billion a year or two ago. There have been moves in other content areas, including records management. Seeking Alpha caught my attention with its article “Hewlett-Packard: Printers More Valuable Than PCs” and its nifty interactive graph. The main point of the write up is that HP, despite its efforts to make its bottom-line as fat as a French-government, certified goose destined for paté, HP is a printer and ink/toner company. With much of its printing technology influenced by Canon, I wondered about HP’s innovation as well. For me, the most interesting comment in the write up was:
HP’s stock is more sensitive to changes in its printer business than changes in the notebook business. A 5% increase in HP’s printer market share will lead to a 4% upside to $53 Trefis [analyst outfit] price estimate for HP’s stock, while a 5% increase in HP’s notebook share will result in less than a 3% upside.
HP may be big but the company has to find a way to generate more bottom-line impact from its other businesses before the printer and ink business softens.
Stephen E Arnold, March 30, 2010
No one paid me to write this about HP.
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