The current worth of HP based on earnings, earning gowth rate, dividend payments, dividend growth rate and financial performance is ~ $81/sh.
Sooner or later, price and value always converage.
GO GO GO HP - 70 by May
He's da man!
I'm looking at his picture that I keep by my desk as I type this . . . actually it's his mug on the cover of "The Warren Buffet Way" by Robert G. Hagstrom, Jr.
Yup, Warren does his own research -- the old fashioned way -- reading annual reports!! His offices are half the size of a tennis court. He has but nine staff. And, unlike us Warren-wanna-be's, their are ZERO computers in his offices. Imagine that. I could stand to like the ol' geezer a wee bit more if he had some Pavillions and DeskJet's lying about . . .
If he'd just reach out and gently touch HWP with his Midas Touch . . .
How much credibility to you give VectorVest? To date, I have not been impressed with their Relative Value and let the truth be known that you plagerized that "Sooner or later, price and value always converage" catch-phrase.
Blue book says my Jeep is worth $14,000. Blue book never went off-roading with me and my jeep.
On a scale of 1 - 10, I give it a 6. As your message implies, no one source is 100% perfect. But as a long term investor,
you must establish a baseline worth or intrinsic value of a company before you take a position on the stock. That baseline worth
can be done through statical analysis of HP's financial data; which is what Vectorvest give you. That value will also depend on
factors which a company can't control; like the Asian financial crisis. Remember that HP has more 50% of sales oversea.
So what I am saying is, you can take the analysis done by Vectorvest then refine the outcome with your own study; a study similiar to what beegdawg2 has done (message 345). Then you should come up with a value or price that you can believe in.
But looking forward, with the different types of business that HP is in (diversifing risk) and the product pipeline that is in development (Merced), a value price range around $80 is not unrealistic.
As for the comment 'you plagerized that "Sooner or later, price and value always converage" catch-phrase'. I didn't know I
need to use footnotes on this message board. Maybe I should have used "". In anycase, I clearly stated for anyone that was
intereted to get on to the Vestorvest site and do the analysis for themselves; then they would have seen the full report. As matter of
fact, I think the phase "Sooner or later, price and value always converage" is just a boiler plate sentence that Vectorvest use
for all the stock.
As for, "Blue book says my Jeep is worth $14,000. Blue book never went off-roading with me and my jeep". Maybe another other person that have the same Jeep and done some modification to their Jeep, as a result, felt their Jeep is worht more than the Blue Book value of $14,000. In short, the Blue Book value is just a baseline number. Depending on your own personal feelings, the price of the Jeep or HP stock can vary.
I love HP. I worked for HP for 20 years and was able to retire at a young age (48) because of the performance of my HP Stock
and Stock options. I say this so that you'll know that I wish HP well. However, HP stock, and any other stock is only worth what
the warket will pay. For the past three years, the market has not been willing to pay more than 23 times trailing earnings for
HP stock. There was a three month period this past summer when HP traded at 24 and 25 times earnings. Current 12 month trailing
earnings are about $3/sh and the analyst consensus expectations for FY98 are about $3.47/sh.
If I see HP hit $66 in the next few weeks, I will sell some three month $65 calls to cover my position because I believe
that the stock will correct back down to its normal trading level of 19 to 20 times earnings ($57 to $60) before moving up again.
You can visit www.bigcharts.com and see the stock versus PE for the past 3 yrs yourself. The stock will probably move up to the
$75 to $80 by year end. That would be a PE of 22 to 23 times year end earnings of $3.47. However, it could be different this
time so who knows. For example, IBM trades at a trailing PE of only 17 and SUN trades at a trailing PE of 25.
The price of $81/sh was calculated by the Vectorvest system on Mondays closing price.
The Vectorvest company claims to use a market timing system, that has NEVER FAILED! The current valuation price for HP base on the HP's closing price (62.60) on Tuesday is $80.30.
You can check the web site yourself, is at
I am not claiming that the $80 range is near term. I am just saying that base on this Vectorvest System, which claims that it has never been wrong, HP has a valuation price of $80 range. This valuation price components can be found on the Vectorvest web. If you trust the Vestorvest system, then you should also believe that the valuation price and the market price will converge.
However, who's to say that any one system is better than any other system. You, bd (retired with HP stocks and options), probably tracks the HP stock alot more closely than many of the long term investors. Hence, can trade within varies buy & sell range. You're are probably right about HP correcting itself once it hits 65 or 66. As matter of fact, the Vestorvest system currently have a hold recommendation on HP.
However, I am sure many investors, myself included, don't have the time to conduct a detail analysis or be concern about taxes, transaction fees, and worry about betting on the wrong side of the stock. For these investors, the $80 range, I think is an acceptable price to shoot for.
Go Go Go HP!! Time: 15:13:38 Bid 64 7/8
Ask 64 15/16
Change: 2 5/16
DB, get ready to cover your position.