After a period of careful consideration and analysis, I have decided to close my position in HPQ.
When I initially entered the trade, my decision was primarily influenced by technical analysis, with the price appearing attractive within the lower end of a parallel channel formed then. Furthermore, HPQ's healthy cash flow and share buyback activities, combined with its inclusion in Warren Buffett's portfolio, provided additional confidence in the trade.
However, recent developments have led me to re-evaluate my position. Fundamental factors such as a significant shortfall in first-quarter free cash flow, weak PC sales, and cautiousness from corporate customers have emerged, indicating potential challenges ahead. Additionally, the reduction in Warren Buffett's position in HPQ, coupled with insider selling and a relatively high long-term debt payback period, further underscored the evolving dynamics within the industry.
Given these considerations, including the proximity of the price to an inflection level and the possibility of a reversal, I have decided to close my position in HPQ. Booked a profit of approximately 7.31% on my invested capital in this trade and will consider a re-entry if price falls back to the lower trendline of the channel formed as of now.
If my perspective changes or if I gather additional fundamental data that influences my views, I will provide updates accordingly.
Thank you for following along with this journey, and I remain committed to sharing insights and updates as my trading strategy evolves. As always, please feel free to reach out with any questions or comments.
Other posts related to this particular position and scrip, if any, will be attached underneath. Do check those out too.
Disclaimer: The analysis shared here is for informational purposes only and should not be considered as financial advice. Trading in all markets carries inherent risks, and past performance is not indicative of future results. It's essential to conduct your own research and assess your risk tolerance before making any investment decisions. The views expressed in this analysis are solely mine. It's important to note that I am not a SEBI registered analyst, so the analysis provided does not constitute formal investment advice under SEBI regulations.