An investment in a company leader in printing would be a good move at this this time. One can make this determination based on the plan that the management of Hewlett-Packard made recently. The plan is to promote and invest heavily in 3D technology.
The company is already the world’s leading manufacturer of PC’s and has been since 2007.
In 2012 HP became the world’s largest PC vendor by unit sales.
The CEO of Hewlett-Packard (HP) Meg Whitman has already announced that the company is planning to enter the 3D printing market on a large scale by June 2014. Although HP has not stated what products will be offered it has stated the focus of the company will be on reducing the cost of 3D printers. In addition, they will also be looking to cut down the time consumption of the process of 3D printing.
An investor can employ a short term strategy to take advantage of the enthusiasm that will be generated when the company moves into 3D technology printing. A spike in the stock price can be expected and a short term investor could profit from this. Or the investor can decide to stick with the company and keep with the stock beyond the original enthusiasm to when the products developed will actually be sold in the marketplace. One might want to employ both strategies for short term and long term gains by selling a portion of the stock portfolio after the initial spike in price and maintain the rest for long term growth prospects.
If the company is able to achieve these two objectives it will give HP a competitive advantage over 3D Systems.
It is important to note that HP spent over $3.4 billion USD on research and development in 2012 alone. This seems to indicate that the company will be able to make the investment needed to achieve the two previously stated objectives which are to make 3D printers faster and cheaper.
The company has a market capitalization of more than $49 billion USD. As it has decided to enter into the 3D printing market it could easily become the biggest player in the industry.
What makes things easier for HP to enter into this market now is that a number of important 3D Systems patents already expired earlier this year so HP will not have to as it were “reinvent the wheel”. They will not have to use resources and spend time on recreating more sophisticated high resolution 3D models.
The company has more than 13 billion USD cash on hand so it can also choose to take a short cut and start using the method employed by 3D Systems to great effect. 3D Systems has acquired over 40 companies since 2011. HP could well decide to absorb a number of smaller companies. This would allow the company to diversify the products that could be offered for sale.
Companies like ExOne, Arcam AB and Organovo. These companies all have less than $50 million USD in annual revenues but new product offerings will improve their balance sheets over time. This reality may tempt HP to acquire them especially since the stocks for these companies have recently gone down in price after major spikes.
Although unlikely at this point, they may also decide to take over 3D Systems itself. It would allow them to absorb the competition but this action will be hard to justify to shareholders at this time but may make sense further down the road.
Another advantage for potential investors is price. On March 28,2014 the price for a share of Hewlett -Packard (HPQ) stock was $32.04 USD (United States Dollar) an increase of 11 cents and a percentage increase of 0.34%. The days range was from a low of $31.94 USD and a high of $32.55 USD. The 52 week range for HP stock is from a low of $19.07 USD to a high of $33.12 USD. The dividend on the stock pays $0.58 USD (1.8%) of the share price.
In the year 2000 the stock exceeded $70.00 USD a share.
Hewlett-Packard founded in 1939 is a company based in the United States headquartered in California. It is mostly known for its products and services that it provides to small and medium sized businesses. It also through a number of subsidiaries provides services and technology products that include software and technology solutions to large enterprises that include customers at the government, education and health sectors of the economy at a world wide level.
More recently the company has through its Personal Systems segment offered both commercial and personal PCs and all related accessories for office use.
The Printing Segment of which HP is famous for offers both consumer and commercial printer hardware, printing supplies, media, software, and Web services. They also provide scanning devices, inkjet and laserjet printing as well as graphic solutions.
The company through its Enterprise Group assists companies with data application and storage as well as industry standard servers. They provide companies with networking products for a wide range of applications and uses.
The Enterprise Services Segment of HP offers technology consulting, outsourcing, and support services to their products and customers in general.
The Software Segment of the business provides businesses and individuals management of information that includes data analytics, information governance, and digital marketing for data.
The company’s Financial Services Segment offers leasing, financing, and assets managing services to companies throughout the world.
If HP is successful in entering the 3D market later this year the value of the company will increase as will the price of its stock. The present price of the stock is already at the high end of its 52 week value but one must now factor in the new foray the company plans to make in 3D printing technology.