One plus one equals three. That’s the math Wall Street often applies to mergers or spin-offs.

Does this magical arithmetic apply to HP (NYSE: HPQ)? The giant personal computer (PC) maker is the product of a complex spin-off that continues to entice — but also confound — investors.

Let’s find out whether the reconstructed HP is finally on solid footing… or whether it’s about to slip and fall.

In this edition of Investing Daily we will discover:

• What makes HP a unique stock?
• Should you buy HP?
• Should you sell HP?
• Overall forecast and outlook for HP.

Let’s get into it!

What Is HP?

Based in Palo Alto, California, HP develops PCs, printers and related supplies, as well as 3D printing solutions.

The company (stylized in the corporate logo as hp) was formed in November 2015, renamed from the PC and printer divisions of the original Hewlett-Packard Company. The latter’s enterprise products and services businesses became Hewlett Packard Enterprise (NYSE: HPE).

All of Hewlett-Packard’s server sales, consulting, storage, software, cloud and networking businesses were put under the HPE umbrella.

The split was engineered whereby Hewlett-Packard changed its name to HP and spun off Hewlett Packard Enterprise as a new publicly traded company. HP retains Hewlett-Packard’s pre-2015 stock price history and its former stock ticker symbol, HPQ. Hewlett Packard Enterprise trades under its own symbol, HPE.

Confused? You’re not alone.

At the time, here’s what the financial press had to say about the spin-off:

HP may have a convoluted corporate history, but it’s a technology sector powerhouse. HP is a component of the S&P 500 Index and it’s the world’s largest PC vendor by unit sales. Whether the company is a worthy investment remains an open question.

Below, we’ll make sense of HP in its present incarnation and tell you whether the stock is a good buy or a toxic equity to avoid.

How Has HP Stock Performed?

HP’s stock has consistently beaten the market. Over the past 12 months, HP has gained 19%, compared to 8.6% for the S&P 500. Over the past two years, HP gained 60.0% compared to 29.9% for the S&P 500.

How Has HP Performed In 2017/2018?

HP gained 41.4% in 2017 versus 19.4% for the S&P 500. In 2018 year to date, HP has gained 19.4% compared to 4.3% for the S&P 500.

Who Are HP’s Rivals?

The following chart, compiled with data from research firm IDC, shows market share of worldwide traditional PC shipments in 2017:

Let’s look at the top three rivals to HP:

Lenovo Group (OTC: LNVGF)

China-based Lenovo designs, makes and sells PCs, tablets, smartphones, servers, electronic storage devices, smart televisions, and information technology software for enterprises.

Lenovo has tried to inject innovation into its moribund product line, but demand continues to wane for its products. The company spent too much money trying to diversify away from laptops and it’s now struggling to service its $10.8 billion worth of net liabilities.

The PC market remains fiercely competitive and Lenovo isn’t in a position to bring compelling new products to the table.

Dell Technologies (NYSE: DMVT)

Texas-based Dell designs, makes and sells PCs, servers, data storage devices, network switches, software, computer peripherals, high-definition televisions, cameras, printers, and other consumer electronics.

Dell, once the world’s largest private technology company, restructured in 2018 and went public again, reemerging five years after its leveraged buyout with a massive debt burden. The company’s product line is diffuse, its technology lackluster, and its corporate strategy unclear. The stock is unlikely to move the needle in 2019.

Apple (NSDQ: AAPL)

The Cupertino, California-based giant is the legendary maker of a host of beloved consumer gadgets, including the iPhone, iPad, MacBook, and Apple Watch.

Apple’s online services include the iTunes Store, iOS App Store, Mac App Store, Apple Music, and iCloud.

Apple is a technology bellwether that’s de-emphasizing its declining MacBook business to focus on smartphones, Apple services, and breakthrough technologies such as self-driving cars.

Read Also: What’s Our Stock Prediction For Apple?

Will HP Go Up In 2019 (Should You Buy)?

HP’s non-PC segments are thriving, especially printing.

The company’s printing business contributes about a third of the company’s total revenue. However, because of its hefty operating margin, the prienting division accounts for twice as much of earnings as the personal systems segment.

To find areas of new growth, HP is offering high-end, more expensive PCs that confer higher profit margins. One of the strongest tailwinds for HP has been rising sales prices of hardware products in the company’s personal systems segment. The company has introduced a well-designed and appealing line-up of premium PCs, desktops, notebooks, and displays that are attracting customers.

The firm also is making a big push into 3D printing, a “disruptive” technology. HP’s foray into the exploding 3D market already is paying off and should drive multi-year growth.

And the stock is a bargain, to boot.

HP’s forward price-to-earnings (P/E) ratio is 11.2, a steal compared to the forward P/Es of 16.5 for the S&P 500 and 16.1 for the informational technology sector.

Will HP Go Down In 2019 (Should You Sell)?

If you’re having difficulty following the company’s twists and turns as it tries to determine how to compete in a global market that’s increasingly embracing mobile devices at the expense of laptops and desktops, you’re not alone.

Years of layoffs, top executive turnover and complex corporate restructuring have taken their toll on employee morale. What’s more, the PC industry is in decline. The rise of mobile ecosystems weighs heavily on the demand for traditional PCs.

Financial restructuring alone might not be sufficient to resurrect Hewlett’s business into the innovative company that two Stanford grads, William Hewlett and David Packard, launched in 1939 in a Palo Alto garage.

Overall HP Forecast And Prediction For 2019

Our final verdict? We’re siding with the bulls. The positives of this company far outweigh the negatives.

HP has done an effective job of reinventing itself, by seizing on cutting-edge technologies while at the same time maintaining the quality of its core PC products. PC industry sales may be on the downswing, but HP has compensated by squeezing higher margins from top-of-the-line offerings.

HP’s management has shown strategic savvy and they have the financial firepower to back it up. HP sits on a cash hoard of more than $7 billion, providing wherewithal to make further strategic acquisitions.

The average analyst expectation is that HP’s year-over-year earnings growth will reach 22.4% in full-year 2018 and 8.40% in 2019. Over the next five years (on an annualized basis), earnings growth is expected to come in at 11.7%, which represents a stunning turnaround from the figure of -17.8% posted during the last five years. The healthy dividend yield of 2.26% is icing on the cake.

We expect the stock to rack up double-digit gains next year, as HP’s strategic initiatives gain traction. In HP’s case, one plus one does indeed equal three.

John Persinos is the managing editor of Investing Daily.