HP Just Earned a Key Spot on Warren Buffett Stocks List. Should YOU Buy HPQ Stock?

HPQ Stock - HP Just Earned a Key Spot on Warren Buffett Stocks List. Should YOU Buy HPQ Stock?

Source: Kent Sievers / Shutterstock.com

Tech stocks are mixed so far on Thursday after a volatile couple of days. However, HP (NYSE:HPQ) is blazing higher on the day, up 16% on news that Warren Buffett’s Berkshire Hathaway (NYSE:BRK-B, NYSE:BRK-A) has taken an interest in the firm. The news was enough to send HPQ stock to all-time highs.

Buffett’s Berkshire took a whopping 121 million share stake of HPQ stock, making it the largest shareholder in HP. That boils down to a $4.2 billion position — before today’s rally — and represents a stake of roughly 11%.

While HP is a leader in PCs, it’s not a leader when it comes to the best-performing tech stocks. Up until the Berkshire investment in HPQ stock, shares were up less than 50% over the prior 12 years.

The Buffett news comes just days after the company announced that it will buy Plantronics (NYSE:POLY) for $3.3 billion. The companies agreed to a $40-a-share deal, which came at a 53% premium to Poly’s prior closing price. The deal is expected to close by the end of the year.

Weekly chart of HPQ stock
Click to Enlarge
Source: Chart courtesy of TrendSpider

According to HP CEO Enrique Lores, “The rise of the hybrid office creates a once-in-a-generation opportunity to redefine the way work gets done,” which is why the company made the acquisition.

Piggybacking off the reason for its recent acquisition, HP Inc. in general has had strong momentum since 2020. The pandemic has clearly driven demand for PC and other home-office related products. You can see on the chart how shares underwent a major breakout in the fourth quarter of 2020.

That led to a huge run to $36, which was the high from May 2021 that stuck until November 2021. Now rotating higher, the first upside target to take note of is between $42 and $44. Above that zone and the $50 to $52 range is the next area to look at.

On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.


Article printed from InvestorPlace Media, https://investorplace.com/2022/04/hp-just-earned-a-key-spot-on-warren-buffett-stocks-list-should-you-buy-hpq-stock/.

©2022 InvestorPlace Media, LLC