Lexmark (LXK): Canary In The Coal Mine?

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After Lexmark (LXK) told Wall St. that it would miss second and third quarter numbers, the stock dropped about 10% to $45 after hitting a 52-week low of $43.50 earlier in the day.

It seems that the printer business is not so hot.

But, are the printer and PC businesses that disconnected? Dell (DELL) and HP (HPQ) both trade near 52-week highs. Dell is around $25 up from $20.52 as a low over the last year. HP is at almost $46, up from $30. HP has a very large printer operation.

The market would have to believe, as clearly it does now, that Lexmark’s problems are restricted to the company and have not spread to other firms in the industry.

But, that may not be true.

Douglas A. McIntyre