Here's Why You Should Add HP (HPQ) Stock to Your Portfolio

A wise investment decision involves buying well-performing stocks at the right time while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.

HP Inc. HPQ has performed well so far this year and has the potential to carry on the momentum in the near term. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.

What Makes HP an Attractive Pick?

An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourses year to date. HP returned a massive 45.9%, which compared favorably with the S&P 500’s gain of 16.7%.

Solid Rank & VGM Score: HP currently carries a Zacks Rank #2 (Buy) and has a Value Growth Momentum Score (VGM Score) of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or #2 offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment.

Positive Earnings Surprise History: HP has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 1.91%.

Strong Growth Prospects: The Zacks Consensus Estimate for fiscal 2018 earnings is currently pegged at $1.79, reflecting year-over-year growth of 8.7%. Moreover, earnings are expected to register 5.7% growth in fiscal 2019. Moreover, in the long run, the company’s earnings per share are expected to grow at the rate of 5.3%.

Growth Prospects

HP’s efforts to turn around its business have been commendable. The company is working on product innovation, differentiation and enhancing the capabilities of its printing business to stabilize the top line.

HP Inc. Revenue (TTM)

HP Inc. Revenue (TTM) | HP Inc. Quote

The latest PC shipment data by IDC depicts that HP’s restructuring initiatives such as focus on product innovations, pricing, marketing and sales activities, divestment of non-core assets and cutting jobs to lower costs are paying off. Per the data compiled by IDC, the company witnessed year-over-year shipment growth for the sixth quarter in a row, after registering decline for five consecutive quarters.

With the start of shipping of A3 multifunction printers to more than 80 countries, which covers all its key markets, HP is likely to revive its printing business and grab a bigger share in the inkjet printer market. Also, the acquisition of Samsung’s printing business is anticipated to support the development and manufacturing of printers.

Other Stocks to Consider

Other stocks worth considering in the broader technology sector include Activision Blizzard ATVI, Applied Materials AMAT and Castlight Health CSLT, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings per share growth rate for Activision, Applied Materials and Castlight Health is projected to be 13.8%, 13.3% and 25%, respectively.

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HP Inc. (HPQ) : Free Stock Analysis Report
 
Castlight Health, inc. (CSLT) : Free Stock Analysis Report
 
Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report
 
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