In an interesting Fast Money segment on CNBC, two traders, FMHR Dr. J and Mike Murphy were given 90 seconds to discuss their views on where the Hewlett-Packard Company (NYSE:HPQ)’s stock price is heading in the short term, i.e. if the stock price has more room to run, being up for 25% since the start of the year.
Dr. J said: “Absolutely more room to run. Nine times forward P/E for this stock”, adding Best Buy Co Inc (NYSE:BBY)’s recent statement that tablets sales are plummeting and that the PC sales are increasing dramatically, something that also can be seen by the performance of Intel Corporation (NASDAQ:INTC) and Microsoft Corporation (NASDAQ:MSFT). He pointed that the company has been up 36% year over year, and added that he likes what they are doing.
Murphy agreed with everything Dr. J said, and emphasized that he also thinks the PC sales are going to help “a company like Hewlett-Packard Company (NYSE:HPQ)”. However, he said that the information is already integrated into the stock: “it’s price sent to the stock. It’s up 26% year to date and we have already heard from Intel Corporation (NASDAQ:INTC), you’ve already seen Hewlett-Packard Company (NYSE:HPQ) react to this news.” Dr. J pointed that those are up 34% year to date, to what Murphy replied that now Hewlett-Packard Company (NYSE:HPQ) is at similar levels, up by 26%. Dr. J jokingly replied that he has 8% more coming.
Mike Murphy elaborated his short-term bear position on the stock: “[…] The last four quarters, even when they did beat on the whisper number, how did the stock react? […] It did not react. Actually, it traded lower […]. The risk at Hewlett-Packard Company (NYSE:HPQ) is to the downside. I like the company long-term, but to buy it up here at $35 I would not do it.”
Dr. J said in a conclusion that the Street doesn’t like the stock, particularly either, with 13 ‘Buys’ and 12 ‘Holds.’ Viewers who voted live were 57% to 43% sided with the bull.
Ralph V. Whitworth‘s Relational Investors owns close to 28 million shares of Hewlett-Packard Company (NYSE:HPQ) as at the end of the second quarter.