Thursday, May 22, 2014

Seeking Alpha: Lenovo Making The Right Strategic Moves To Build Value

Lenovo (OTCPK:LNVGY) has come along nicely since I wrote about the company as a Top Idea in late July of 2013. Up more than 30%, Lenovo has done well on continued PC, handset, and tablet growth. The shares were rocked when Lenovo followed up the long-expected acquisition of IBM's (IBM) x86 server business with the not-nearly-so-expected acquisition of Motorola from Google (GOOG). Integrating one damaged business was doing to be hard enough, but now Lenovo is paying more than $5 billion for two sizable businesses that need a lot of TLC to turn around.

I continue to be bullish on Lenovo (and a shareholder), as I believe the company does have relevant experience in integrating large acquisitions. What's more, I think the IBM and Google deals address a lot of the remaining deficits in Lenovo's portfolio from a strategic perspective, while Lenovo's demonstrated capabilities in sourcing, manufacturing, and distribution efficiency can fix a lot of what ails these businesses. With a fair value in the high $20s on an elevated discount rate, I continue to believe Lenovo can be a good stock from here.

Follow this link to continue:
Lenovo Making The Right Strategic Moves To Build Value

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