I'm buying HPQ at the Open on Monday, August 16, 2010. My stop is $34. My target will be at least $55 over 1-3 years.
The last week has been eventful for Hewlett-Packard (HPQ). It's CEO got caught with his hand in the cookie jar -- HPQ settled a sexual harrassment suit against him and found he was falsifying expense reports to have a good time with her at the company's expense. He was then forced to resign and the stock has taken a big hit since August 6 (one week ago) when the news came out:
The real question here is: Does HP deserve to be priced this low just because the CEO quit? Was this particular CEO so good at his job that he is not replaceable? I doubt it. This looks like a knee-jerk reaction to bad news.
This is an investment, so it may go down a little further -- no one regularly catches the exact low. If that happens, don't worry about it. This is the kind of value play that even Warren Buffett couldn't resist. The price is so low that the risk of buying it is low, too. It may even go back up to the $45 area within a few weeks. GK