Tuesday, May 15, 2012

Xerox Has Long-Term Value

Xerox (XRX) has a P/E ratio of 7 and a P/OCF ratio under 5. As a result, it trades under book value (!) despite an ROE greater than 10% and operating margins in the high single digits. Before you dismiss this company out of hand as a dinosaur, consider that this is not your father's Xerox. Just as we've recently seen how Dell is no longer the PC company you thought it was (and therefore may be undervalued as well), neither is Xerox the copier/printer maker of yesteryear. Today, Xerox derives the majority of its revenues and profits from the sale of services (business process, IT and document outsourcing).Read more...

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