Chanos Sees Cash Flow Declining at HPQ

Today Jim Chanos came out on CNBC TV and highlighted to the world the declining Cash Flow at Hewlett-Packard.

Below are two charts of HPQ's quarterly operating cash flow statistics showing their recent declines.
click to HPQ Stockdiagnostics 20 quarter OPS chart
click to HPQ Stockdiagnostics 20 quarter FCF chart
click to HPQ Stockdiagnostics Long Term OPS & FCF Growth Tables


Chanos from CNBC transcript in video link:
"those acquisitions have enabled them to maintain a revenue base and see a declining cash flow base. those are maintenance capital expenditures or maintenance r & d hidden as acquisitions. and when you value the company, when you begin to look at the fact that this company has purchased its r & d, capitalized it, if you will, r & d is normally expensed, you begin to see a totally different picture. look at the middle of the left table which shows you that the free cash flow four buybacks and dividends, but after cap and acquisitions a much different animal and has turned negative. in addition, the balance sheet has been destroyed here. all right"


A look at today's morning posts at Equities Research with recent Stockdiagnostics Downgrades.

company	ticker	date	Downgrade	$ Close	Time	% Return
Houston American Energy	HUSA	5/23/2011	$17.25	$1.06	14m	94%
First Solar, Inc.	FSLR	5/10/2011	$128.51	$14.46	14m	89%
Telestone Technologies	TSTC	12/2/2010	$11.10	$1.71	18m	85%
SuperValu, Inc.	SVU	1/192009	$13.32	$2.28	30m	83%
Nokia Corporation	NOK	8/25/2011	$8.17	$1.69	15m	79%
SunPower Corporation	SPWR	5/18/2011	$21.10	$4.42	14m	79%
STR Holdings, Inc.	STRI	5/10/2011	$16.35	$4.15	14m	75%
Aixtron S.E.	AIXG	3/7/2011	$42.31	$12.91	17m	70%
Research In Motion	RIMM	9/26/2011	$21.68	$6.92	10m	68%
Scientific Learning Corp.	SCIL	3/16/2011	$3.00	$1.05	16m	65%
Senomyx, Inc.	SNMX	5/16/2011	$5.92	$2.18	14m	63%
GrafTech International,Inc.	GTI	5/2/2011	$22.57	$8.88	4m	61%
Image Sensing Systems	ISNS	4/4/2011	$13.50	$5.25	16M	61%
Sony Corporation	SNE	8/24/2010	$28.07	$12.30	23m	56%
PMFG, Inc.	PMFG	5/24/2011	$18.00	$8.00	14m	56%
Arcelor Mittal NY Registry	MT	5/16/2011	$31.92	$15.06	14m	53%
Alcoa Inc	AA	4/25/2011	$16.67	$8.28	17m	50%
Titanium Metal Corporation	TIE	5/13/2011	$18.86	$11.09	14m	41%