Tag Archives: Kennedy Thompson

Dow Spotlight Stock of the Week: Hewlett-Packard

By Matt Thalman, The Motley Fool

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In 2013, Hewlett-Packard has been the best-performing component of the Dow Jones Industrial Average . Shares are up more than 54%, while the Dow itself has risen by only 11.15%, and its second best-performing component, Travelers , has climbed by just 17.53% in comparison. But this past week gave us HP‘s worst performance so far this year, with a 7.84% drop — its first decline since the week of Feb. 11.

So what happened?
On Monday, one of the company’s top executives, Senior Vice President Ajei Gopal, announced that he’s leaving the company to join Silver Lake Partners — the private-equity group that’s attempting to take Dell private. Gopal will probably play a large role in helping Silver Lake turn Dell around, considering he’s helped in the same capacity at HP. But HP‘s turnaround is far from complete, so this isn’t a move HP shareholders wanted to see.

On Tuesday, Goldman Sachs analyst Bill Shope lowered HP stock from a “neutral” to a “sell,” saying he could see shares falling 31% from Monday’s closing price of $23.31. That means Shope believes that HP shares, which currently sit at $21.97, will drop to $16.09 sometime in the future.  

Wednesday brought little news, but shares fell again, probably in reaction to the downgrade. Then Thursday arrived with more drama, as the company announced that Ray Lane will step down as chairman of the board but will retain a seat. Board members John Hammergren and G. Kennedy Thompson also announced that they’ve chosen to resign from their positions.

Shares closed the day up 1.78%, but they resumed their tumble on Friday, falling another 1.48% during the trading session. The seesawing performance of the stock following the announcements indicates to me that shareholders have mixed feelings on the board members’ moves.

During the most recent shareholder meeting, when board members were re-elected, Hammergren and Thompson received only 54% and 55% of the vote, respectively. Lane didn’t do much better at 58%. Typically, board members receive more than 90% of the vote, so it was clear that a large portion of shareholders weren’t happy with the job these members had been doing. Most analysts cite the $11 billion Autonomy purchase, and the subsequent $8 billion writedown, as the source of shareholder discontent.

What now?
The loss of an SVP during a turnaround is definitely a negative. He probably knows what H-P has planned for the future, and now that he’s going to work on behalf of a competitor, he could use that knowledge against HP in some fashion.

The downgrade is also a negative, but much less of one. It’s just one person’s opinion and should be viewed that way. In the short term, the downgrade has already affected the share price and may put further downward pressure on the stock in the coming weeks, but it will ultimately have only short-term effects. A downgrade in no way has any impact on the overall health of …read more

Source: FULL ARTICLE at DailyFinance

What's Wrong With HP Today?

By Anders Bylund, The Motley Fool

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Hewlett-Packard just took a much-needed step toward a healthier business: Chairman Ray Lane and two other directors stepped down from the board of directors. Lane will remain a director but without the chairman’s leadership duties. Banking veteran G. Kennedy Thompson will leave the board entirely in May, alongside John Hammergren, who is also CEO of health care information company McKesson. Activist investor Ralph Whitworth serves as chairman until further notice. No replacements have been named for the two outright departures.

Investors have been calling for something like this to happen. Each of these three directors earned less than 60% approval ratings in HP‘s recent annual shareholder meeting, while every other director won more than 90% “yea” votes. This is the kind of “vote of no confidence” that drove Michael Eisner out of Walt Disney nearly 10 years ago. When you’re running for office unopposed, you really should expect far higher approval ratings. Lane and company are simply following the will of their shareholders.

Moreover, HP‘s board has long been seen as a liability. Corporate-ethics expert Nell Minow quipped that these people might as well carry a banner saying, “We have no idea what we’re doing.” That was two years and two CEOs ago — not to mention the whole Autonomy debacle. A wholesale housecleaning is very much in order.

And yet HP shares are down 1.6% on the news. It’s the third-worst performer on an already weak Dow Jones Industrial Average today. Financial giant American Express plunged 2.3% on weak payroll data, which will put direct pressure on the company’s top line. Cisco Systems fell 2.2% due to terrible earnings at rival F5 Networks; the entire networking sector is suffering today, and not even mighty Cisco is immune to sectorwide swings.

There are plenty of other losers on the Dow today, but only these two fared worse than HP.

Why, then, is HP plunging on what looks like good news for the long-term health of the company? Well, change is always scary. The action may have underscored HP‘s shaky situation to some investors. Maybe the changes didn’t go far enough; Lane is still on board, and his companions will stay around for another month.

The real reason is probably “all of the above.” That disgraceful shareholder vote set the stage for today’s action, but it still comes as a shock to the system.

Will CEO Meg Whitman pair up with interim chairman Whitworth and really shake HP up? I hope so. This is their chance to catch up with a rapidly changing market. The current strategy sure isn’t working.

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP is rapidly shifting its strategy under Whitman’s leadership. Does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor …read more

Source: FULL ARTICLE at DailyFinance

Hewlett-Packard Chairman to Relinquish Post

By Eric Volkman, The Motley Fool

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Hewlett-Packard has begun the search for a new board chairman following Raymond Lane‘s decision to vacate the job. Ralph Whitworth, currently an HP director, will take up the position on an interim basis until a new chairman is found.

Lane will stay on as a director at the company.

Additionally, HP announced that two other directors have resigned from the board. John Hammergren and G. Kennedy Thompson are to depart in May, serving until that month’s board meeting. As with the chairman position, the company has begun a search for replacements.

Hammergren and Thompson are both longtime board members. They have been directors for eight and seven years, respectively.

The article Hewlett-Packard Chairman to Relinquish Post originally appeared on Fool.com.

Fool contributor Eric Volkman has no position in Hewlett-Packard. The Motley Fool has no position in Hewlett-Packard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

HP: A Small Victory for Shareholders

By Alex Dumortier, CFA, The Motley Fool

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Stocks clawed back some of yesterday’s losses today, with the S&P 500 , and the narrower, price-weighted Dow Jones Industrial Average gaining 0.4%.

Reflecting these gains, the VIX Index , Wall Street‘s fear gauge, fell 2%, to close below 14. (The VIX is calculated from S&P 500 option prices and reflects investor expectations for stock market volatility over the coming thirty days.)

HP: Finally, something to cheer about
Last December, I asked, Is Yahoo! a Model for H-P?, arguing that:

There’s no question that HP could use a board shakeup and possibly a new CEO. Much of the change at Yahoo! came at the impetus of activist investor Dan Loeb. HP already has an activist investor in place: Ralph Whitworth of Relational Investors joined the board in 2011. What is he waiting for?

It appears that the board of Dow component Hewlett-Packard is finally taking some responsibility for the disastrous lapses in governance that have inflicted enormous harm on the company and its shareholders over the past several years.

According to a press release published today, Ray Lane will step down as chairman of the board (though he will remain a board member), to be replaced on a temporary basis by Ralph Whitworth. Two other members, John Hammergren and G. Kennedy Thompson, are also resigning their seats. Whitworth will also replace Hammergren at the head of the Finance and Investment Committee.

Mr. Lane took the measure of shareholder sentiment last month, when he was re-elected to the board in a proxy vote with a noticeably lukewarm 59% of the votes — the third lowest percentage among all eleven directors. Only Messrs. Hammergren and Thompson scored lower, with 54% and 55%, respectively.

The choice of the permanent chairman and new board members will be a crucial test of the company’s resolve to turn itself around. Over the past few years, HP has been a heavyweight champion when it comes to destroying goodwill, both the accounting variety, through disastrous acquisitions, and that of its shareholders. Today’s announcement is a step in the right direction, but the journey to restoring the company’s good name on Wall Street will be a long one.

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP‘s rapidly shifting its strategy under the new leadership of CEO Meg Whitman. But does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor blip on its road to irrelevance? The Motley Fool’s technology analyst details exactly what investors need to know about HP in our new premium research report. Just click here now to get your copy today.

…read more

Source: FULL ARTICLE at DailyFinance

HP quashes investor unrest, looks to servers for salvation

Shareholder meetings are almost boring affairs, but today, at the Computer History Museum in Mountain View, California, HP’s Board quietly prevailed in several intense battles, including the preservation of its very own membership. The overall message: Let’s look foward to the future, and leave our checkered past behind.

HP
HP‘s shareholder meeting seemed design to project stability.

There’s plenty the Board would no doubt like to put behind it, including six quarters of declining profit and revenue . Though HP isn’t doing quite as badly as expected, sales of its bread-and-butter PCs, workstations, and printers, continue to fall. As a result, shareholders have agitated to oust two of HP’s Board members along with its outside auditing firm, Ernst & Young. And many continue to question the company’s 2011 acquisition of Autonomy, and a Department of Justice investigation isn’t helping. Meanwhile, back at the garage, HP is embroiled in a lawsuit with Oracle over server support.

Against this ragged backdrop, HP’s Board seemed extra-determined to project both sober responsibility and immense excitement. It made no mention of its declining businesses, instead pointing to new opportunities in IT and servers for the burgeoning big-data revolution. In addition, none of the controversial shareholder proposals prevailed.

Shareholder drama fizzles

The biggest flap concerned a campaign by CtW Investor Group to vote down two of HP’s current Board members. CtW blamed John H. Hammergren for his role in the extremely expensive Autonomy acquisition. It also targeted G. Kennedy Thompson for his role in maintaining the high non-audit fees paid to Ernst & Young, which it saw as a conflict of interest with the firm’s role as the company’s financial auditor. When the shareholders voted, however, each Board member received over 50 percent of the votes needed to stay on team HP, and the retention of Ernst & Young as HP’s outside auditor was favored by a very high margin of over 84 percent.

To read this article in full or to leave a comment, please click here

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Source: FULL ARTICLE at PCWorld

Hewlett-Packard Leads the Dow to New Highs

By Dan Dzombak, The Motley Fool

US Initial Claims for Unemployment Insurance Chart

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The Dow Jones Industrial Average is up after for the 10th day in a row following multiple positive reports on the state of the economy. As of 1:15 p.m. EDT the Dow was up 59 points, or 0.41%, to 14,515. The S&P 500 was up 0.4% to 1,561.

There were three U.S. economic releases today.

Report

Period

Result

Previous

Weekly new unemployment claims

March 2 to March 9

332,000

342,000

Producer price index

February

0.7%

0.2%

Core PPI

February

0.2%

0.2%

Current account deficit

Q4

($110 billion)

($112 billion)

Source: MarketWatch U.S. Economic Calendar.

While the PPI was up 0.7%, which was expected as higher energy costs impacted producers. Absent energy costs, the PPI was just up 0.2%.

The one to pay attention is the unemployment claims report. Weekly new unemployment claims fell to a seasonally adjusted 332,000. That’s down from last week’s 342,000 and below analyst expectations of 350,000. Last year, new unemployment claims averaged between 360,000 and 370,000 and never really broke out of that range. The declining level of new unemployment claims is a good sign for the economy, indicating that the jobs market is strengthening. It remains to be seen whether this is a trend or just a blip.

US Initial Claims for Unemployment Insurance data by YCharts.

New unemployment claims can be volatile, so it is generally better to watch the four-week moving average, which dropped by 2,750 to 346,750. That’s the lowest level since 2008.

While the jobs market is strengthening, the economy is still not adding jobs fast enough to significantly reduce the unemployment rate anytime soon. The Federal Reserve Open Market Committee has said it plans to continue QE3 until the unemployment rate hits 6.5% or inflation picks up. Until then, the Fed will continue buying up $85 billion worth of long-term assets every month to prop up the economy.

Today’s Dow leaders
Today’s Dow leader is Hewlett-Packard , up 1.8% to $21.71 on no real news. Earlier this week the British Serious Fraud Office opened an investigation into HP‘s accusations of fraud against former executives of Autonomy. If you recall, HP acquired Autonomy for $10 billion in 2011, only to write the acquisition down for $8.8 billion last year. HP accused former executives — including Autonomy’s founder and former CEO, Mike Lynch — of fabricating sales to boost Autonomy’s financials. While American authorities commenced investigations soon after HP‘s accusations, this is the first notice that British authorities are also investigating.

While the stock was hit hard last year, dropping 47% in 2012, there have been no repercussions for the board members who approved the deal. Institutional proxy advisor Institutional Shareholder Services is recommending that investors vote against HP chairman Ray Lane, audit committee head G. Kennedy Thompson, and finance and investments committee head John Hammergren.

HP is rapidly shifting its strategy under the new leadership of CEO …read more
Source: FULL ARTICLE at DailyFinance

HP's Surge Leads the Dow to a New All-Time High

By Dan Dzombak, The Motley Fool

ADP Change in Nonfarm Payrolls Chart

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The Dow Jones Industrial Average is making moderate gains following two better-than-expected economic reports. As of 1:20 p.m. EST, the Dow is up 39 points, or 0.27%, to 14,287. The S&P 500 was up just 0.1% to 1,541.

There were two U.S. economic releases today.

Report

Period

Result

Previous

ADP private-sector jobs

February

198,000

215,000

Factory orders

January

(2%)

1.3%

Source: MarketWatch U.S. Economic Calendar.

First up, payroll processor ADP reported that the private sector added 198,000 jobs in February. That’s down slightly from January’s addition of 215,000 jobs but above analyst expectations of 175,000. ADP‘s report always comes out two days before the government‘s nonfarm payrolls report, which will be released on Friday. The government‘s report includes both private and public jobs data. Economists expect the government‘s report to show jobs growth of just 160,000 and no change in the unemployment rate, which sits at 7.9%.

ADP Change in Nonfarm Payrolls data by YCharts.

The second economic release came from the Department of Commerce, which reported that factory orders dropped 2% in January. That’s below December’s 1.3% growth but better than analyst expectations of a 2.2% drop. Factory orders include both durable and nondurable goods. Last week the advance report on durable-goods manufacturers showed that durable-goods orders dropped 5.2% in January. This led analysts to lower their expectations for the factory goods report. However, the initial report from the Department of Commerce was slightly too dour, as the drop in durable-goods orders was revised upward to a 4.9% drop for January.

Today’s Dow leader
Today’s Dow leader is Hewlett-Packard , up 3.6% to $21.10. HP is leading the Dow higher for the second day in a row. Yesterday the company announced that it was selected by Teradyne “to improve operational efficiency, reduce network downtime and boost design-phase efficiency for new products” by using HP‘s FlexNetwork architecture. While this is a small victory, it shows that HP can continue to innovate and win contracts in the hotly contested networking and enterprise-storage space.

Public-facing wins are a must, as Hewlett-Packard is undergoing a turnaround under new CEO Meg Whitman. Three members of the company’s board came under fire yesterday from proxy advisory firm ISS, which recommended that investors vote against re-electing Chairman Ray Lane, head of the audit committee; G. Kennedy Thompson; and John Hammergren, the head of the finance and investments committee. All three were in their positions in August of 2011 when HP paid $10.3 billion for Autonomy, which later earned HP a massive $8.8 billion writedown. While HP is alleging fraud by Autonomy’s executives, this was the second $8 billion-plus writedown of a recent acquisition by HP in 2012. Meg Whitman certainly has her work cut out for her.

The question remains: Is HP one of the least appreciated turnaround stories on the market, or is this a minor detour on its road to irrelevance? The Motley …read more
Source: FULL ARTICLE at DailyFinance

The Dow Breaks a Record, Thanks to These Stocks

By Matt Thalman, The Motley Fool

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With the Dow Jones Industrial Average setting a new all-time closing high today, taking a moment to consider how far we have over the past few years is important. The last all-time high was set in 2007, just before the financial crisis, the credit squeeze, and the start of the Great Recession.

You could argue that from a number of standpoints, we’re back to where we were in 2007. But although the major indexes are at the same price levels, stocks are much cheaper today than they were in 2007. The S&P 500 still has about 25 points to go until it breaks a new all-time high record. But back in 2007, the index had a price-to-earnings ratio above 65, while today it’s only 17.5.  

The Dow set its record today by gaining 125 points, and it now sits at 14,253. The Nasdaq added 42 points, or 1.32%, and the S&P 500 put on another 0.96% today. With the Dow gaining that many points, a number of its components surely ended the day higher.

The Dow’s winners
The Dow’s best-performing component of the day was Cisco , which saw its shares rise by 2.3%. Although the Dow has now broken its all-time high record, Cisco remains well below its all-time highs and fairly lower than the mid-$30 price range it traded in back during 2007. Even so, the networking giant is now within striking distance of its 52-week high, and investors seem confident that as the economy improves, so will Cisco’s profits.

After falling 1.11% yesterday, shares of United Technologies ended today up 2.12%. The move higher followed U.S. Air Force Lt. General Christopher Bogdan‘s speech at a defense conference, where he reassured the audience that the F-35 fighter jet program is not in trouble. Last week, comments he made were apparently taken out of context. But today, he made it clear that while the Defense Department‘s most expensive program has had problems, the F-35 is still on track, and costs are beginning to come down. United Technologies subsidiary Pratt & Whitney is scheduled to provide 4,000 engines throughout the life of the program.  

Another stock that fell yesterday but posted a strong gain today was Hewlett-Packard . After dropping by 0.79% on Monday, shares rose by 2% today. Earlier today, the ISS, a well-known proxy advisory firm, released a statement recommending that HP shareholders vote against re-electing a number of the company’s board members. Because of their roles in approving the ill-fated Autonomy acquisition, the ISS thinks Chairman Ray Lane, John Hammergen, and G. Kennedy Thompson should be removed from their seats. HP eventually wrote down $8.8 billion of the $10.3 billion it paid for Autonomy.

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP‘s rapidly shifting its strategy under the new leadership of CEO Meg …read more
Source: FULL ARTICLE at DailyFinance

This Stock Is Leading the Dow to an All-Time High

By Dan Dzombak, The Motley Fool

Filed under:

The Dow Jones Industrial Average is up to a new all-time high following two positive economic reports. As of 1:35 p.m. EST the Dow is up 157 points, or 1.1%, to 14,285. The S&P 500 is up 1.2% to 1,543.

There were two U.S. economic releases today.

Report

Period

Result

Previous

CoreLogic Home Price Index

January

0.7%

0.2%

ISM Non-Manufacturing Index

February

56%

55.2%

The first economic release was CoreLogic’s Home Price Index, which rose 0.7% from December and 9.7% in the 12-month period ending Jan. 31. CoreLogic chief economist Mark Fleming noted:

The [Home Price Index] showed strong growth during the typically slow winter season. With these gains, the housing market is poised to enter the spring selling season on sound footing. The improvements are materializing across the country, with all but Delaware and Illinois showing increasing HPI and 15 states within 10 percent of their peak values.

The second economic release was from the Institute for Supply Management, which reported that its Non-Manufacturing Index rose 0.8 percentage points to 56% in February. That’s above January’s 55.2% and analyst expectations of 55.2%. Any reading higher than 50% indicates economic growth. The rise in the index to 56% indicates that responders believe the economy is still growing, and at a faster rate than in January.

Today’s Dow leader
Leading the Dow to record highs is beleaguered tech giant Hewlett-Packard , up 2.6%. Last year was rough for HP, which finished down 46% after two $8 billion-plus writedowns for relatively recent acquisitions. The second of those writedowns was for Autonomy, which was purchased in August of 2011 for $10.3 billion and written down for $8.8 billion in November 2012.

Today, in response to the Autonomy disaster, institutional proxy advisor ISS recommended that shareholders in Hewlett-Packard vote against the re-election of HP chairman Ray Lane, as well as board members John Hammergren and G. Kennedy Thompson. John Hammergren is chairman and CEO of McKesson and chairs HP’s finance and investment committee. G. Kennedy Thompson was CEO of Wachovia from 2000 to 2008 and is chairman of HP’s audit committee.

Meg Whitman’s turnaround of the company is beginning to take shape. A key part of that should include the removal of those who were responsible for oversight of the company’s two enormously failed acquisitions.

The question remains: Is HP one of the least appreciated turnaround stories on the market, or is this a minor detour on its road to irrelevance? The Motley Fool’s technology analyst details exactly what investors need to know about HP in our new premium research report. Just click here now to get your copy today.

…read more
Source: FULL ARTICLE at DailyFinance