Xerox Corp (NYSE:XRX) — This name is familiar as one of the first companies to mass-market copy machines. They were expensive, ungainly, and prone to jamming. But they produced a true copy (black & white) of whatever you wanted to place on its glass.
This large-cap company still serves the worldwide document processing market by offering a complete line of printers and copiers, as well as higher-growth document technology and outsourcing. On Jan. 1, XRX completed a split into two separate companies: a services firm, Conduent Inc (NYSE:CNDT) and a separate hardware company, which retains the Xerox name.
Standard & Poor’s projects that this move will benefit shareholders since the new management’s strategy is to increase growth opportunities while cutting costs. They have a goal to normalize cash flow by 2019 and provide visibility by increasing dividends, which are already at a yield of 3.4%, and initiate a share repurchasing plan. S&P maintains a four-star buy on the stock with a 12-month target of $9 despite a revenue shortfall due to the roll-out of “A3/A4” products in Q2.
From the technician’s view, it is not possible to make price predictions based on trend lines, moving averages and other tools associated with technical analysis. However, the current company’s stock did make a leap of several points following the break-up, and an attempt is being made to form a bull channel that began with a reversal on Feb. 1.
This is a very speculative venture. However, new experienced management with the resources of a brand name and the size of a large-cap enterprise are encouraging. Thus for the speculative trader, or long-term investor, a purchase at under $7.50 may prove to be profitable.
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