Signs of an HP comeback

Things are looking brighter for Hewlett-Packard, as it rebounds on Wall Street and awaits a showdown on its biggest government contract.

The news is looking brighter for Hewlett-Packard, at least on Wall Street.

The company’s stock hit a closing low of $11.71 in November. Yesterday, it closed at $21.32. As I write this, it is up to $21.69.

CNBC also is reporting that there has been an uptick of calls or option buys. The business network says there have been about 5,000 calls for April 23, which are betting that HP’s stock will top $23 by that date.

Looking through their announcements, it doesn’t look like any one event has sparked the comeback.

It is touting cloud successes in government and the commercial market. It had a $220.5 million win with the Homeland Security Department to improve call centers for U.S. Citizenship and Immigration Services.

In its first quarter 2013 results, announced Feb. 21, the company reported that revenue and diluted earnings were down, but cash flow from operations was up 115 percent to $2.6 billion. The company’s debt position improved as well.

Perhaps the best sign, giving investors some confidence, is that the bleeding and the instability at HP seems to have bottomed out. The worst may be over, so with the company on a more stable track, confidence is returning.

On the government side of the business, the next big milestone is the $5 billion Navy Next Generation Enterprise Network contract, which is expected to be awarded in May, though it has been delayed multiple times.

HP is squaring off against Computer Sciences Corp. and Harris Corp. for the lucrative contract.

Winning that contract will mean HP gets to keep the work it has been doing for more than a decade under the Navy-Marine Corps Intranet contract, its biggest piece of government business.

The competition lives up to the overused sports cliché of a "must-win."