Apple Inc. (AAPL) and Hewlett-Packard Company (HPQ) are ‘Buys’: Dan Morgan


Hewlett-Packard Company (NYSE:HPQ) has reported a rise in its sales in the quarterly earnings after eleven consecutive quarters with declines. Discussing Hewlett-Packard Company (NYSE:HPQ)’s and Apple Inc. (NASDAQ:AAPL)’s stocks in a program on CNBC, Dan Morgan, Synovus Trust senior vice president, said that HP must focus on the software industry to keep its growth up. He thinks that software and enterprise domain has the potential to give HP a strong growth in the future. Morgan said that HP is a good stock for dividends and Apple Inc. (NASDAQ:AAPL) is also a ‘buy’.

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“[…] Personal computer systems as you know, is very strong, but the operating margin is so low, it’s only 4%. Again, I think it’s a product mix issue, they have got to get over to the areas that create the highest margins, which is Enterprise group and software, and kind of get away from desktop. And until they do that, you are going to see these kind of benign topline and bottom line growth numbers which is basically what we saw in this quarter,” said Morgan.

Morgan said that Hewlett-Packard Company (NYSE:HPQ) has only 3% of software share in its growth, whereas printing and PCs share 50% of the revenue. This shows that the company is not focusing more on software and enterprise, which are the cores of revenue generation in the contemporary markets. Morgan said that Hewlett-Packard Company (NYSE:HPQ) will have to focus its lens of the software more than hardware if it wants to be a successful in the future.

Answering the question about stocks of Apple Inc. (NASDAQ:AAPL) and Hewlett-Packard Company (NYSE:HPQ), Morgan said that he has two different strategies in stock domain, one is grow strategy and the other is dividend strategy. Morgan that that Apple Inc. (NASDAQ:AAPL) falls in both dividend and growth strategies and he will definitely buy Apple Inc. (NASDAQ:AAPL) shares. Hewlett-Packard Company (NYSE:HPQ), on the other hand falls in dividend strategy as there is a need of persistent growth for the company to depict itself as a growing entity on the market. Morgan said that there is a very less chance that Apple Inc. (NASDAQ:AAPL) will be rolling out iTV and iWatch in September.

Billionaire investor Carl Icahn is among the largest shareholders of Apple Inc. (NASDAQ:AAPL), owning over 52.7 million shares. Ralph V. Whitworth is the top shareholder of HP, having 28 million shares of the company.

Disclosure: None

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