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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