Hewlett Packard Enterprise: Positioned Well For Multi-Year Outperformance (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Hewlett Packard Enterprise has strong growth prospects, enabled by customers' adoption of its GreenLake and AI solutions. Revenue quality is also increasing with greater annualized revenue streams.
• HPE is trading at an attractive 30.6% discount to its peers. A higher annuity portion of revenues is a catalyst for multiple re-rating.
• A strong, multi-year breakout is imminent on the relative technicals after more than 2 years of consolidation after a sharp V-shaped recovery from support levels.
• An explosion in net working capital suggests that growth is enabled via the provisioning of financing solutions. Worsening cash flow conversion metrics and credit quality are key risks to monitor.
• My thesis is focused on the operating business of HPE. Hence, my bullish view is applicable to both the equity share class and the convertible preferred equity share class. I am invested in the equity shares as I believe that has more upside potential, albeit at a higher risk.

Read the full article here.