The computing giant that’s super cheap

Guess who Wall Street Connected Profit Like The Pros Brought to you by: Dear Reader, We have some BIG UPDATES for all you Wall Street Connected subscribers. [And you need to take action now to make sure you don't miss out!]( Our newsletter got a complete makeover. We overhauled the format and layout of the newsletter, making it easier to read and simpler to follow. And gave it a nifty new title - THE SPILL [But you won't receive this newsletter unless you sign up HERE.]( Because pretty soon, Wall Street Connected will disappear FOREVER! Proprietary Data Insights Retail Top Communication Equipment Stock Searches This Month Rank Name Searches #1 Cisco 838 #2 Aerohive Networks 735 #3 Nokia 391 #4 Calix 298 #5 Zebra Tech 247 #10 HP Enterprise 151 Sponsored [The Financial Pandemic of 2022]( If you think what happened in the first phase of the pandemic was shocking, brace yourself for what’s coming next. Financial Pandemic 2.0 is likely to strike with even greater speed and force than 1.0. And this time, even the rich will take a hit. But, you can turn this crisis into an opportunity to swiftly build your wealth. Just follow [these seven simple steps](. To find out more, [go here now](. What we’re watching [The computing giant that’s super cheap]( A look at a computing company that represents incredible value... HP Enterprises. [Watch Now]( Stock Analysis The computing giant that’s super cheap Companies that don’t change are destined for failure. In 2015, Hewlett Packard split into two entities. We aren’t interested in the PC-focused business. Instead, we think the HP Enterprise (HPE) side is an incredible value. Most investors ignore this stock because...well the company hasn’t done well over the last several years. In fact, it only got the 10th most searches by retail investors amongst communication equipment stocks according to our proprietary data. But we think that’s about to change. And the growth prospects are pretty exciting, especially when you consider shares trade at 7.46x Non-GAAP forward earnings and 4.71x forward cash flows. So what exactly will this future company look like? HPE’s Business Hewlett Packard Enterprise focuses on enterprise-facing hardware and services. Revenues breakout as follows: - Compute (45% of revenues) - General purpose server and certain workload-optimized server portfolios. - HPC & MCS division (11% of revenues) - Consists of high performance compute,mission-critical systems, and edge compute offerings. - Storage unit (17% of revenues) - Combines the former Hybrid IT-Storage business unit, related operational services, and the hyperconverged infrastructure products. - A & PS segment (4% of revenues) - Consultative-led services which were previously a part of the Hybrid IT-HPE Pointnext business unit. - Intelligent Edge (11% of revenues) - HPE Aruba and HPE Aruba Services, containing primarily the WLAN portion of the old “networking” segment with a small portion of the old “technology services” segment. - The Financial Services segment (12% of revenues) - Leasing, financing, IT consumption and utility programs, and asset management services. Since the spinoff, HPE remains focused on restructuring and realigning its business to deliver sustainable long-term growth. Translation - mergers and acquisitions while shedding non-core assets. In 2021, HPE acquired Ampool, Zerto, Determined AI and Cloud Physics to create capabilities and add products to the fast-growing cloud space. This comes after prior pickups of Silver Peak, Cray and MapR, as well as five other businesses acquired in 2018. All these units aim to push HPE more towards the higher-margin hybrid IT model such as enterprise-class server and storage markets. Lastly, HPE sees AI and the industrial internet of things as its next major markets. Consequently, the company committed $4 Billion in investments to enhance capabilities across its network. HPE Financials The most relevant period to look at for HPE is after the spinoff. While revenues declined from 2018 to 2020 they’ve turned around as the economy reopens. Margins also expanded nicely to record levels, helping drive some spectacular earnings results. Normally, we would be bit concerned at the $12.5 Billion in long-term debt as well as the $7 Billion in contract liabilities held under ‘other non-current liabilities.’ However, the majority of the debt is held at the finance company and is non-recourse to HPE. That means it’s actually their customers’ debt and HPE collects fees and interest on it. Plus, HPE has access to plenty of cash and credit to continue its transformation. Valuation When we said the company was cheap, we weren’t lying. HPE smokes every comparison to the rest of the IT sector. And check out that juicy 3.34% dividend yield, which isn’t common in the sector. To be fair, analysts don’t expect much growth from the company over the next year or so as it continues its transformation. However, you can’t ignore these prices. Our Opinion - 9/10 This is what we’d call a deep value play. We expect the company to continue to sell or spin-off lower-margin business units while acquiring and investing in higher-margin growth segments like cloud computing. With a 3.34% dividend, shareholders can reinvest the dividend to help lower their average cost per share. Ideally, we like the stock at $13-$15 per share. [Make sure to sign up for The Spill to keep receiving our premier investment newsletter.]( # [submit to reddit]( [submit to reddit]( [submit to reddit]( To ensure delivery of all emails, [whitelist us](. Update your email preferences or unsubscribe [here](. View our privacy policy [here](#). Copyright ©2021 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc. newsletter is for information purposes only and opinion-based. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or against losses. No representation or implication is being made that using any of these methodologies or systems will generate returns or ensure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions. [Link](