On September 27, 2023, renowned investor Warren Buffett (Trades, Portfolio) made a significant move in the stock market by reducing his stake in HP Inc (HPQ, Financial). This article will delve into the details of this transaction, provide an overview of Buffett's investment philosophy and portfolio, and offer an analysis of HP Inc's stock performance and financial health. We will also compare Buffett's position in HP Inc with that of other gurus.
Details of the Transaction
Warren Buffett (Trades, Portfolio) reduced his holdings in HP Inc by 4.17%, selling 4,614,423 shares at a trade price of $25.94. This transaction had a -0.03% impact on Buffett's portfolio, bringing his total shares in HP Inc to 106,047,751. Despite the reduction, HP Inc still constitutes a significant 0.79% of Buffett's portfolio, with Buffett holding a 10.73% stake in the company.
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 the legendary Benjamin Graham at Columbia University, who greatly influenced his investment strategies. Buffett is the Chairman of Berkshire Hathaway, which he transformed from a textile company into a major insurance conglomerate. His investment philosophy is rooted in value investing, an approach adapted from Benjamin Graham's strategy. Buffett seeks to acquire great companies trading at a discount to their intrinsic value and hold them for a long time. He invests only in businesses he understands and always insists on a margin of safety. His portfolio consists of 49 stocks, 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 giant in the PC and printing markets. The company has focused on these markets since it exited IT infrastructure in 2015 with the split from Hewlett Packard Enterprise. HP Inc has a broad and global customer base, with only one-third of its sales coming from the U.S. The company completely outsources manufacturing and relies heavily on channel partners for its sales and marketing. As of September 28, 2023, HP Inc has a market capitalization of $25.34 billion and a stock price of $25.64.
Analysis of HP Inc's Stock
HP Inc's stock is currently modestly undervalued, with a GF Value of $31.89 and a Price to GF Value of 0.80. The company's GF Score is 88/100, indicating good outperformance potential. HP Inc's Financial Strength is ranked 5/10, while its Profitability Rank and Growth Rank are both 8/10. The company's Piotroski F-Score is 6, and its Altman Z score is 1.93, indicating financial stability.
Other Gurus' Positions in HP Inc
Other gurus who hold HP Inc in their portfolios include Dodge & Cox, Joel Greenblatt (Trades, Portfolio), and Jefferies Group (Trades, Portfolio). However, none of these gurus hold as large a stake in HP Inc as Warren Buffett (Trades, Portfolio), who remains the largest guru shareholder in the company.
Conclusion
In conclusion, Warren Buffett (Trades, Portfolio)'s recent reduction in his stake in HP Inc is a significant move that has implications for value investors. Despite the reduction, HP Inc remains a substantial part of Buffett's portfolio. The company's stock is currently modestly undervalued, with good outperformance potential. However, investors should always conduct their own research and consider their investment goals and risk tolerance before making investment decisions.
