Will H-P be the Turnaround Story of 2013?

December 29, 2012

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E = Equity to Debt Ratio Is Weak

The debt-to-equity ratio for Hewlett-Packard isn’t terrible, but there is plenty of room for improvement. The same can be said for the balance sheet. Dell (NASDAQ:DELL) is stronger in both areas.

	Debt-To-Equity	Cash	Long-Term Debt
HPQ	1.25	$11.30 Billion	$21.79 Billion
DELL	.86	$11.27 Billion	$9.03 Billion

T = Technicals on the Stock Chart Are Weak

Hewlett-Packard has been performing well of late, but the last three years has been atrocious.

	1 Month	Year-To-Date	1 Year	3 Year
HPQ	21.25%	-42.75%	-42.97%	-71.26%
DELL	15.12%	-28.13%	-28.79%	-25.48%
S&P 500	1.71%	16.28%	15.60%	36.03%

At $14.34, Hewlett-Packard is currently trading above its 50-day SMA, but below its 100-day and 200-day SMA.

50-Day SMA	13.78
100-Day SMA	15.79
200-Day SMA	19.01

E = Earnings Have Been Weak

Annual revenue and earnings have been decreasing.

	2008	2009	2010	2011	2012
Revenue ($)in billions	118.36	114.55	126.03	127.24	120.36
Diluted EPS ($)	3.25	3.14	3.69	3.32	-6.41

When we look at last quarter on a YoY basis, we see the same story.

	9/2011	12/2011	3/2012	6/2012	9/2012
Revenue ($)in billions	32.12	30.04	30.69	29.67	29.96
Diluted EPS ($)	.17	.73	.80	-4.49	-3.49

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