Hewlett Packard
Thesis
Hewlett Packard is a strong cash flow generating, market-leading company that is being punished by the market for recent company announcements and multiple CEO changes. The sell off has been overdone, with HP stock moving from the year high of $50 to the recent low at $22 in September. The current price of $28 represents an opportunity to buy HP with a 45% margin of safety to its intrinsic value of $51, indicating an 83% upside.
Did it work?
The stock price increased by 90.1% since the pitch, significantly exceeding the projected upside of 83%. This strong performance aligns with the thesis that the market had overreacted to negative news and that HP was undervalued. Given the substantial return and the positive trajectory of the stock, the thesis can be considered successful.
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