Is Hewlett-Packard Company (HPQ) Destined for Greatness?

My fellow Fool Sam Mattera notes that HP’s printing business, which accounts for 21% of its total revenue, remains its most profitable business segment. However, Cerner provided one rare ray of hope when it decided to employ HP’s analytical platform. HP has also cut 11,700 positions to save on operational expenses, and more cuts are likely in the offing. HP’s new Moonshot low-power servers might also prove appealing, but they run the risk of being sidelined, as many midsize businesses move into the cloud for their connected infrastructure. Growing demand for HP’s converged storage solutions should also provide a boost.

With shares trading at 5.5 times trailing 12-month free cash flow, HP looks like a screaming bargain, but a stock so cheap can just as easily be a value trap. Investors would be taking somewhat of a leap of faith into HP’s future, which has nothing resembling a sure thing just yet.

Putting the pieces together

Today, HP has few of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.

The article Is Hewlett-Packard Destined for Greatness? originally appeared on Fool.com and is written by Alex Planes.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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