Find The Best Stocks With Perfect Trade Setups In Minutes A Day

Stop wasting time looking for the right stocks.  Free training on how to find perfect stock trades that can move 300-1,500%.  Learn the # 1 key to successful stock investing and how to find success even If the market is crashing, rebounding… or just going sideways.

Do Not Delay - Click Here Now

 

XRX is up 30% in the last two months – could it go even higher?

Stock Picking Secrets -  Now you can buy the best stocks at the best time in under 30 mins a day. See How

For the past year and a half, the Technology sector has been one of the most volatile segments of the economy to try to follow, as tariffs and trade tensions have rocked stocks in practically every industry within the sector to some extent or another. Despite that volatility, a number of those stocks have performed quite well year to date, with momentum picking up even more since the beginning of the fourth quarter. The past week has tempered trade enthusiasm a bit, but even so the market seems to operating on the assumption that a trade deal between the U.S. and China is more likely to be reached, and a looming December 15 deadline set by the Trump administration to impose a new set of tariffs to be delayed at the least.


If you're a stock investor who wants to retire early, check out this free training and learn how!  Click Here


Altogether, trade and an accommodative Fed attitude toward interest policy seem to be giving the market reason to hope for better things in the near future. If continued progress on trade can be made, it’s reasonable to suggest that Technology stocks in general should benefit; most have recently been including conversations about trade in their corporate earnings reports and its negative impact on their results, and so any kind of easing, or even (in the best-case, “blue sky” scenario) elimination of existing tariffs should help tech companies regain some of the ground that the trade war has cost them. That would give investors even more reason to extend a bull market that is already the longest in recorded history.

While it’s been at least a generation since Xerox Corporation (XRX) could claim a spot as a power player in the Tech world, they’ve never lost their relevance. Even now they continue to not merely survive, but to succeed and prosper by sticking to what they do best. That’s part of the reason the stock is up more than 85% since the beginning of 2019. A proposed merger between XRX and HPQ in November helped pushed the stock to a new multi-year higher a little above $39.

Does the hope of continued progress on the trade front, with the prospect of a major acquisition on the horizon mean that XRX could keep the bullish momentum going? The company has some very interesting fundamental strengths working in its favor, and a value proposition that offers an interesting, if debatable argument. Let’s look at the numbers so you can decide for yourself.

Fundamental and Value Profile

Xerox Corporation is a provider of digital print technology and related solutions. The Company has capabilities in imaging and printing, data analytics, and the development of secure and automated solutions to help customers improve productivity. The Company’s primary offerings span three main areas: Managed Document Services, Workplace Solutions and Graphic Communications. Its Managed Document Services offerings help customers, ranging from small businesses to global enterprises, optimize their printing and related document workflow and business processes. Managed Document Services includes the document outsourcing business, as well as a set of communication and marketing solutions. The Company’s Workplace Solutions and Graphic Communications products and solutions support the work processes of its customers by providing them with printing and communications infrastructure. XRX’s current market cap is about $7.9 billion.

Earnings and Sales Growth: Over the last twelve months, earnings increased more than 27%, while sales decreased by -6.5%. In the last quarter, earnings improved by 9.09% while revenues declined a little under -4%. XRX operates with an adequate, but strengthening margin profile; Net Income versus Revenues over the past year was 7.28%, but increased in the last quarter to 10%.

Free Cash Flow: XRX’s free cash flow is healthy, at a little more than $1.2 billion. That translates to an attractive Free Cash Flow Yield of about 14.5%. It is also worth noting that XRX’s Free Cash Flow was $0 in June of 2018, with the company showing consistent improvement in this critical metric in every quarter from that point.

Debt to Equity: XRX has a debt/equity ratio of .66. That’s generally a conservative number that reflects management’s approach to debt management. Since the beginning of 2018, the company’s long-term debt has decreased from a little more than $5.2 billion to its current level of $3.2 billion. Their balance sheet also shows $922 million in cash and liquid assets.

Dividend: XRX pays a dividend of $1.00 per share, which translates to an annual yield of 2.72% at the stock’s current price.

Price/Book Ratio: there are a lot of ways to measure how much a stock should be worth; but one of the simplest methods that I like uses the stock’s Book Value, which for XRX is $21.75, and which translates to a Price/Book ratio of 1.69 at the stock’s current price. The stock’s historical average Price/Book ratio is 1.14, which means the stock is overvalue, by almost -33%. Given the generally positive, and improving fundamentals I just outlined, however, I’m a little more inclined to lean on XRX’s Price/Cash Flow ratio, which is currently about 26% below its historical average. That puts the stock’s long-term target price at around $46 per share.

Technical Profile

Here’s a look at the stock’s latest technical chart.

Current Price Action/Trends and Pivots: The diagonal red line traces the stock’s upward trend from the end of 2018 to its peak at about $39.50 in mid-November. It also provides the baseline used to calculate the Fibonacci retracement lines shown on the right side of the chart. The stock is about -5% below that high, with current momentum clearly on the bearish side. Immediate support is around $36 based on the stock’s July peak; if it drops below that point, it could drop to about $31.50, which is where the 38.2% retracement line rests. A push above resistance at $39.50 would give the stock room to push to highs in the mid-$40 range that the stock hasn’t seen since late 2004.

Near-term Keys: XRX is a stock with a solid fundamental profile, and what I think is a very interesting value proposition. That could make the stock a useful long-term value position – assuming you are willing to accept that the stock could see near-term downside pretty easily if broader, bearish market pressures come back into play. If you are an aggressive, short-term trader, there could be an interesting bullish opportunity if the stock can regain its bullish momentum and stage a break above $39.50; that could be a good signal to buy the stock or to work with call options. If you prefer to work the bearish side, the short-term probabilities are quite a bit stronger; a drop below $36 could be an excellent signal to short the stock or consider working with put options, with an eye on $31 as potential target price for a bearish trade.

By the way, if you liked this article, you'll LOVE this Meaty free training I just published on the top 3 questions and challenges every investor faces AND how to overcome them. It's titled "10k into $2.4 Million in 18 months" and you can grab it for free here

There are risks inherent in all investments, which may make such investments unsuitable for certain persons. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. You may lose all of your money trading and investing. Do NOT enter any trade without fully understanding the worst-case scenarios of that trade. And do NOT trade with money you cannot afford to lose. Past performance of an investment is not necessarily indicative of its future results. No assurance can be given that any implied recommendation will be profitable or will not be subject to losses. Information provided by the Company is not investment advice. The Company is not a registered investment adviser, stock broker, or brokerage. You agree that the Company does not represent, warrant, or take responsibility that any account will or is likely to achieve profit or losses similar to those shown. Examples published by the Company are selected for illustrative purposes only. They are not typical and do not represent the typical results of all stocks within the Companys software or its individual scans and searches. No independent party has audited any hypothetical performance contained at this Web site, nor has any independent party undertaken to confirm that they reflect the trading method under the assumptions or conditions specified.

X