On September 13, 2023, Warren Buffett (Trades, Portfolio), the legendary investor and chairman of Berkshire Hathaway, reduced his stake in HP Inc (HPQ, Financial), a leading player in the PC and printing markets. This article provides an in-depth analysis of the transaction, Buffett's investment philosophy, and the financial health of HP Inc.
Details of the Transaction
The transaction saw Buffett reduce his holdings in HP Inc by 5,502,172 shares, representing a change of -4.55%. The shares were traded at a price of $28.81 each. Following the transaction, Buffett's total holdings in HP Inc stand at 115,450,646 shares, accounting for 0.96% of his portfolio. This reduction has a minor impact of -0.05% on Buffett's portfolio, and his holdings now represent 11.68% of HP Inc's total shares.
Profile of Warren Buffett (Trades, Portfolio)
Warren Buffett (Trades, Portfolio), often referred to as "The Oracle of Omaha", is one of the most successful and respected investors in history. He studied under Benjamin Graham at Columbia University, who had a significant influence on his investment strategies. Buffett is known for his value investing strategy, which involves acquiring great companies trading at a discount to their intrinsic value and holding them for a long time. He currently has 49 stocks in his portfolio, with a total equity of $348.19 billion. His top holdings include Apple Inc (AAPL, Financial), American Express Co (AXP, Financial), Bank of America Corp (BAC, Financial), Chevron Corp (CVX, Financial), and Coca-Cola Co (KO, Financial). The technology and financial services sectors dominate his portfolio.
Overview of HP Inc
HP Inc, formerly known as Hewlett-Packard, is a major player in the PC and printing markets. The company, which was listed on November 6, 1957, has a broad and global customer base, with only one-third of its sales coming from the U.S. It completely outsources manufacturing and relies heavily on channel partners for sales and marketing. As of September 14, 2023, HP Inc has a market capitalization of $27.37 billion and a stock price of $27.69. The company's PE percentage stands at 11.95, indicating its profitability.
Analysis of HP Inc's Stock
According to GuruFocus, HP Inc's stock is modestly undervalued, with a GF Value of $31.94 and a Price to GF Value of 0.87. The stock has seen a year-to-date price change ratio of 3.51% and a price change ratio of -3.89% since the transaction. The company's GF Score is 87 out of 100, indicating good outperformance potential.
Financial Health of HP Inc
HP Inc has a Financial Strength rank of 5 out of 10, a Profitability Rank of 8 out of 10, and a Growth Rank of 8 out of 10. The company's Piotroski F-Score is 6, and its Altman Z score is 1.96. HP Inc's cash to debt ratio is 0.18, and its interest coverage is 9.44.
Market Momentum of HP Inc
HP Inc's stock has a Momentum Rank of 10 out of 10, indicating strong momentum. The company's RSI 14 Day stands at 28.81, and its Momentum Index 6 - 1 Month is 19.86.
Other Gurus' Investment in HP Inc
Other notable investors who hold shares in HP Inc include Dodge & Cox, Joel Greenblatt (Trades, Portfolio), and Jefferies Group (Trades, Portfolio). Berkshire Hathaway Inc, led by Warren Buffett (Trades, Portfolio), holds the most shares in the company.
In conclusion, Warren Buffett (Trades, Portfolio)'s recent reduction in his stake in HP Inc is a significant move that reflects his investment strategy. Despite the reduction, HP Inc remains a significant part of his portfolio. The company's strong financial health and market momentum suggest that it continues to offer good investment potential.
