XRX

Xerox Corp

TMT


Presented:01/15/2019
Price:$22.81
Cap:$5.44B
Current Price:$10.36
Cap:$1.29B

Presented

Date01/15/2019
Price$22.81
Market Cap$5.44B
Ent Value$11.17B
P/E Ratio317.69x
Book Value$21.77
Div Yield2.89%
Shares O/S238.28M
Ave Daily Vol3,976,922
Short Int3.02%

Current

Price$10.36
Market Cap$1.29B
Xerox Corp. engages in the integration of paper and digital products. It operates through the following segments: Document Technology, Services, and Other. The Document Technology segment focuses on strategic products groups, which share common technology, manufacturing, and product platforms. The Services segment comprises solutions and services such as managed print services, workflow automation services, communication and marketing solutions, and revenues from partner print services offerings. The Other segment includes paper sales in its developing market countries, licensing revenues, global imaging system network integration solutions, and electronic presentation systems, and non-corporate items. The company was founded in 1906 and is headquartered in Norwalk, CT.

Publicly traded companies mentioned herein: Apollo Global Management LLC (APO), FUJIFILM Holdings Corp (4901 JP), HP Inc (HPQ), Moody’s Corp (MCO), S&P Global Inc (SPGI), Xerox Corp (XRX)

Highlights

The presenter is long shares of Xerox Corp (XRX), noting a compelling case to be made for the company to be acquired by either Fujifilm or a private equity buyer. However, the relationship between XRX and Fujifilm has been strained to a significant degree due to well-publicized recent events, including the May 2018 departure of XRX CEO Jeff Jacobson, who went behind the board’s back to broker a deal with Fujifilm. XRX’s value to Fujifilm - via the Fuji Xerox JV - may be too attractive to pass up, but the actors involved - including Carl Icahn and Fujifilm CEO Shigetaka Komori - do not appear to be on the best of terms at the moment. With XRX trading at ~$22, the market is clearly skeptical of the company’s prospects; however, a low- to mid-20% FCF yield (taking into consideration a sale of the receivables) is attractive, and the presenter sees the potential for upside of 80% (to ~$40) if the dispute can be resolved and the company sold.

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Idea Discussion

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