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HP2-Z05 - Selling the HP ProCurve Portfolio - Dump Information

Vendor : HP
Exam Code : HP2-Z05
Exam Name : Selling the HP ProCurve Portfolio
Questions and Answers : 40 Q & A
Updated On : April 23, 2019
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HP2-Z05 Questions and Answers

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HP2-Z05 Selling the HP ProCurve Portfolio

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HP2-Z05 exam Dumps Source : Selling the HP ProCurve Portfolio

Test Code : HP2-Z05
Test Name : Selling the HP ProCurve Portfolio
Vendor Name : HP
Q&A : 40 Real Questions

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HP Selling the HP ProCurve

HP ProCurve enhances gigabit, administration | Real Questions and Pass4sure dumps

Hewlett-Packard Co. again signaled its intention to play main league ball in networking with the introduction Monday of recent management application and excessive-velocity Ethernet device.

The enterprise has more advantageous concentrated its components behind its ProCurve enterprise LAN division during the past 12 months and boosted its revenue amid a basically flat networking market, based on some business analysts. a big expense expertise in opposition t chief Cisco techniques Inc. and different opponents has helped the unit ranking extra earnings in hard instances, they mentioned.

HP’s focal point with ProCurve is on simplicity, protection and low normal cost of possession, in response to Amol Mitra, director of product marketing for the ProCurve Networking business.

On Monday the ProCurve unit fleshed out its choices for gigabit Ethernet to the laptop and 10-gigabit Ethernet on the company backbone, as well as its network management application. Gigabit Ethernet on pcs, already supported on many PCs, can enable an commercial enterprise to trade the way it handles statistics, in response to Leanne Leon, product supervisor with HP. The speedy connection can permit personnel to make use of gigantic data over the community with out lengthy delays, so the information can dwell on a server, she pointed out. That might also imply enhanced productiveness because personnel don’t have to stay up for a duplicate of the file to down load, and distinctive copies of the file won’t proliferate as users make alterations to their downloaded copies.

The business added 10/one hundred/1000Mbps Ethernet stackable switches, the 24-port swap 2824 and forty eight-port swap 2848, both of which aid simple IP routing. both additionally encompass the alternative of using fibre on some ports.

For its ProCurve swap 4100gl collection chassis, HP delivered a 22-port 10/100/1000Mbps module with fibre alternatives. It additionally provided two new bundles: the 4160gl, an eight-slot chassis with three of the new modules, and the 4140gl, a four-slot chassis with two of the brand new modules. Early subsequent 12 months, HP will ship a new module for the ProCurve change 5300xl sequence chassis, with sixteen 10/one hundred/1000Mbps ports together with fibre options, Leon stated.

For the ProCurve 9300 collection chassis, HP brought a two-port 10-gigabit Ethernet module purchasable with single-mode fibre ports for long-latitude or prolonged-range community connections. lengthy-latitude optics can aid runs provided that 10 kilometres and prolonged-range optics can support distances as splendid as forty kilometres.

ProCurve has additionally enhanced its software for managing a community. beginning Nov. 1, with each managed switch it's going to give the new HP ProCurve supervisor software, which offers administrator features reminiscent of community status assistance, automatic discovery of ProCurve instruments, mapping of network devices and the skill to manipulate contraptions remotely. The application can also be downloaded free.

For extra management capabilities, HP unveiled HP ProCurve supervisor Plus. It contains equipment for enforcing company policies via distinct network priorities and first-rate of carrier and for assigning switch ports to digital LANs.

The 2800 series of gigabit Ethernet switches appear to be a great wager for connecting servers to a community used for returned-usa Media everyday Inc., in Richmond, Va., talked about Richard Lee, the business’s director of operations. relocating from 100Mbps to 1Gbps Ethernet slashed returned-up instances in testing of a 2800 collection switch, Lee pointed out. Media common, a longtime consumer of HP programs and network apparatus, makes use of a mix of Cisco and HP equipment. The HP products are very professional and sometimes a good deal much less expensive, and a lifetime assurance and free support add to the discount rates, he pointed out.

“You buy the box and that’s it,” Lee stated.

aggressive pricing, a revered brand, product simplicity and expansion into new classes comparable to mounted-configuration Layer three routing switches are among the elements which have helped ProCurve make good points in the market, analysts referred to.

ProCurve’s Ethernet swap income grew 18 per cent between the first and 2nd quarters of this year whereas its port shipments accelerated 12 per cent, based on Mark Fabbi, vice-president of enterprise communications at Gartner Inc. in the 2nd quarter HP become fourth international in commercial enterprise Ethernet swap earnings in the back of Cisco, Nortel Networks Corp. and 3Com Corp., and third in port shipments, at the back of Cisco and 3Com, he pointed out.

Market research company Dell’Oro neighborhood Inc. mentioned the identical earnings rankings for the 2nd quarter and stated ProCurve is just a bit behind 3Com. It grabbed 3.three per cent of Ethernet switch income that quarter, in the back of Nortel’s 9 per cent and Cisco’s overpowering 68 per cent market share, stated Dell’Oro analyst Seamus Crehan.

notwithstanding the ProCurve division isn’t respiratory down Cisco’s neck these days, it may be in a few years, some talked about. First it must build up its income channels and customer base, stated Zeus Kerravala, an analyst on the Yankee community, in Boston.

“once they try this, there’s no motive they can’t develop into a greater bold opponent,” Kerravala mentioned.

Making its network apparatus enterprise more aggressive with Cisco’s doesn’t threaten HP’s partnership with the dominant vendor, during which HP’s revenue drive sells Cisco gear together with servers and different IT products, he spoke of. HP wouldn’t drop Cisco until it notion it could movement a enhanced volume of network apparatus with the aid of doing so, an not going conclusion for now, Kerravala spoke of.

For its half, HP believes the approach is a means to present valued clientele a decision, Mitra pointed out.

HP’s renewed focus on ProCurve is a smart stream because the community equipment gives bigger margins than many of the enterprise’s items, in accordance with Kerravala.

“You’ve acquired to promote loads of PCs to healthy what ProCurve makes,” he stated. HP officers were now not obtainable for touch upon product margins.

The switch 2824 has a list cost of US$2,499; the swap 2848 charges US$4,899. each are available now. The change GL 10/a hundred/a thousand-T module for the 4100 chassis prices US$2,199, the change 4140GL configuration costs US$4,399 and the 4160GL is US$6,499. All three will ship in December. the two-port 10-gigabit Ethernet module for the ProCurve 9300 prices US$35,699. The long-latitude optic is priced at US$5,999 and the prolonged-range at US$12,999. items for the 9300 might be available next month. HP ProCurve manager Plus will also be ordered now and has a suggested list cost of US$1,999.

linked downloadCreate a Unique Selling Proposition for Your Global Market Sponsor: EDCCreate a different selling Proposition to your international Market

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ProCurve Networking by way of HP Embarks on safety Roadshow across the vicinity | Real Questions and Pass4sure dumps

HP nowadays kicked off its 2005 security roadshow designed to update clients on the recently launched comfy routing and cellular access options.right through the action-packed concentrated conferences, shoppers and IT partners can have a chance to speak to consultants on the latest HP ProCurve portfolios and will acquire trade-main capabilities on security options centered at bettering ROIT.“We had over a hundred purchasers at nowadays’s experience in Riyadh and are expecting fabulous outcomes in Kuwait and Jordan later this week,” mentioned Ahmed Bawazir, business construction supervisor ProCurve Networking by HP, HP center East. “valued clientele saw nowadays for the primary time, the subsequent phase in HP’s range of community products. HP continues to construct breakthrough options with superior elements at low-budget expenditures and with the introduction of ProCurve relaxed Router 7000 collection into the market, ProCurve is assembly the existing and future company needs for the WAN, LAN and wireless LAN,” Bawazir added.

HP ProCurve’s protection Roadshow is decided to discuss with Kuwait city on eleven may also and Amman Jordan on sixteen may additionally. shoppers from govt institutes, fiscal institutes, fitness and hospitality sector are expected to attend. 

The ProCurve Networking business unit of HP is a corporation of commercial enterprise networking options comprising wired and instant enterprise networking items, functions and solutions - together with WAN routers, Ethernet switches, routing switches, instant entry aspects and network-management functions - which permit purchasers to construct networks in accordance with open requisites that meet present and future wants for security, efficiency and reliability.   Recognising the essential migration of intelligence and functionality to the network part, the ProCurve Adaptive area structure offers agencies a price-helpful, handy-to-manipulate strategy for reaching command from the middle with handle to the area.  ProCurve was placed within the challenger quadrant in research and advisory enterprise Gartner, Inc.’s 2004 Magic Quadrant file for global Campus LANs.

HP is a know-how options issuer to consumers, businesses and associations globally. The company’s choices span IT infrastructure, international capabilities, company and home computing, and imaging and printing. For the 4 fiscal quarters ended Jan. 31, 2005, HP earnings totalled $eighty one.8 billion. more information about HP (NYSE, Nasdaq: HPQ) is purchasable at

About HP center East

HP is the biggest expertise and options company in the middle East with 670 employees and subsidiaries in Dubai, Abu Dhabi, Riyadh, Jeddah, Khobar, Cairo and Ramallah servicing the GCC, Egypt and the Levant.

HP has been present in the center East considering that 1968, and opened its first regional workplace in 1994.HP core East is the market leader for commercial enterprise, Small and Medium business and buyer expertise products, and presents a big portfolio of solutions and capabilities in quite a few business domains.

HP Claims Cisco 'choice' Title | Real Questions and Pass4sure dumps

Emboldened by means of its extended partnership with Microsoft, HP ProCurve is positioning itself as the clear choice to Cisco with renewed vigor.

Senior vice president Marius Haas delivered the opening keynote address at Interop this week, the first time an professional from HP or HP ProCurve has done so, Haas referred to. HP also has some of the largest exhibition cubicles on the display, housing a full, existence-dimension Halo digital conferencing room.

The opportunity has possibly certainly not been more advantageous for HP ProCurve. The company has been making mammoth market share gains in Ethernet switching over the past couple of years to turn into the No. 2 dealer behind Cisco. at the same time, opponents equivalent to Nortel were struggling with chapter and restructuring, including conducting negotiations to sell the company in entire or in materials.

indeed, observers view HP's $a hundred and eighty million, four-yr deal to integrate products with Microsoft for unified communications and collaboration alternatives as a alternative of Nortel and its imaginative Communications Alliance with Microsoft.

Couple these activities with a poor economic system prompting companies to accept as true with alternatives with the intention to reduce charge, and or not it's no ask yourself HP is crowing.

"users are asserting their networks are overly advanced, proprietary, costly, and they are held hostage without a choices," Haas said all over his keynote tackle. "there isn't a intent there can't be change pushed through business standards that places purchasers lower back in handle. There must be a catalyst though, with the willpower to make that alternate within the industry. HP goes to be that driving drive. we can exchange the video game and alter the rules."

Haas then mentioned that HP, in terms of market share, is first in PCs and printers, and 2d in networking. He referred to that HP as a company has "wholly embraced" its ProCurve networking arm, and that the business has various items to tackle a few markets, together with increasing its statistics core choices. Haas also noted HP ProCurve's launch early this 12 months of the ProCurve ONE application to combine "best in type" applications on excellent of a ProCurve network.

a type of companions is Microsoft, with which HP has a 25-12 months historical past as a associate. This week's expansion and funding into UC and collaboration ratchets that up -- and has HP ProCurve confident in its prospects.

"this is what is going on to alternate the competitive panorama," Haas stated of ProCurve's partnerships and momentum.

This story, "HP Claims Cisco 'choice' Title" become at first posted with the aid of network World.

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Selling the HP ProCurve Portfolio

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3 Tech Stocks With Dividend Yields Above 3% | real questions and Pass4sure dumps

If you like tech stocks but you're an investor who wants a portfolio that also generates income, then you'll need to narrow your stock search to companies that pay dividends. While many tech stocks don't offer large dividends, some do. To that end, I've identified three stocks that meet the following two criteria: 

  • The company offers a dividend yield of at least 3%.
  • Current dividend payouts are supported by the company's free-cash-flow generation. (In other words, the stock is not a "yield trap.")
  • The three stocks I've chosen are Broadcom (NASDAQ:AVGO), IBM (NYSE:IBM), and HP Inc (NYSE:HPQ). 

    A room filled with data center servers.

    Image source: IBM.

    1. Broadcom

    Broadcom is one of the best-run semiconductor companies in the world. Led by CEO Hock Tan, the company has amassed a collection of technology franchises that are best-in-class and allow it to both deliver solid revenue growth and churn out incredible profitability. (I say "technology" because Broadcom has gone from being a pure semiconductor company to one that also offers software through its recent acquisitions of Brocade and CA Technologies.)

    You don't necessarily need to know the ins and outs of Broadcom's business portfolios to understand why it's a solid dividend-paying tech stock. What you do need to know is that the company has delivered robust free cash flow growth for years on end, and that growth has translated into a solid and rapidly growing dividend -- the shares currently offer a dividend yield of 3.45% -- because the company's policy is to give back half of the free cash flow that it generated in the prior year in the form of a dividend in the current year. 

    AVGO Dividend Chart

    AVGO Dividend data by YCharts

    Broadcom is a company that investors can count on to deliver solid free cash flow growth over the long term and share its success with its stockholders.

    2. IBM

    IBM isn't the sexiest tech stock on the planet. The company's recent performance has been characterized by revenue declines and a share price that's materially lower today than it was five years ago. 

    Nevertheless, IBM is a company that still generates a massive amount of free cash flow, and, thanks to substantial share repurchase activity over the years, is able to split that free cash flow among fewer shares than it would otherwise have. As of this writing, IBM shares offer a dividend yield of about 4.39%. Moreover, since IBM has a solid track record of annual dividend increases, shareholders should expect one the next time the company declares a dividend -- this will likely happen later this month. 

    It's also worth noting that IBM isn't stretching itself too thin to pay its current dividend. Over the past 12 months, the company raked in a whopping $12.31 in free cash flow per share -- just shy of twice what it needs to cover its current dividend. This means that even if IBM's free cash flow generation were to remain flat for the foreseeable future (IBM is guiding to free cash flow of $12 billion in 2019 -- up slightly from $11.9 billion in 2018, though down from around $13 billion in 2017), it would be able to keep boosting its dividend for a while. IBM does need to get on a sustainable growth track, however, for its stock price to start delivering better returns.

    3. HP Inc

    One stock that seems to be out of favor right now is HP Inc, which is well known as a leading maker of PCs and printers. HP investors were shaken in its most recent quarter when the company reported weaker-than-expected results in its printing segment, driven by worse-than-expected sales of its printing supplies. HP's print business essentially operates on a razor-and-blade model and, in this case, sales of the blades (printing supplies) fell short, especially in the EMEA region. The shortfall, per CEO Dion Weisler, was due primarily to market share loss. 

    Time will tell whether the company's efforts to regain market share in printing supplies works out -- if it does, it could go a long way toward countering the current bear thesis on the stock. But the sell-off in the shares has potentially created an opportunity for yield-oriented investors. As of this writing, HP's shares offer a dividend yield of 3.21%. The dividend is backed by a company that raked in $2.36 per share in free cash flow over the last twelve months -- more than enough to cover its annualized dividend three times over. 

    HP is also a company that has shown a strong commitment to its dividend, raising it each year that it has been a stand-alone entity. (HP Inc was formed from the splitting of Hewlett-Packard into two companies: HP Inc and Hewlett-Packard Enterprise.) 

    Investor takeaway

    All three of these stocks offer dividend yields in excess of 3%, and all of them are likely to continue to raise their dividends in the years ahead. My favorite of the bunch is Broadcom because I think its business has the highest growth potential, and I expect its dividend growth rate to be significantly faster than that of either IBM or HP. 

    That being said, IBM offers the highest yield of the three today, and if the company gets back on a sustainable revenue and free cash flow growth track, investors could see both meaningful share price appreciation as well as an acceleration in its dividend growth rate in the coming years.

    HP Inc has the lowest yield of the three, but it's the cheapest stock of the bunch on a trailing price-to-earnings basis, trading at 8 times trailing twelve-month earnings, versus 15 times for IBM and 21 times for Broadcom. The jury is still out as to whether HP's stock is cheap for a good reason.

    HP Inc also seems to be focusing a significant amount of its free cash flow on share repurchases, but if it wanted to significantly beef up its dividend to bring in more income-oriented investors, it would certainly have the financial wherewithal to do so. The company's shares could also offer significant capital appreciation in the near to medium term if it's able to successfully demonstrate to investors that its business is more sustainable than what its market price versus earnings seems to suggest.

    HP PartnerOne Chief: Expect Changes Aimed At Helping HP VARs Sell Against Cisco | real questions and Pass4sure dumps

    HP PartnerOne Chief Tom LaRocca, who oversees HP's robust PartnerOne channel program, spoke with CRN Editor News Steven Burke and Senior Editor Joseph F. Kovar about PartnerOne incentives aimed at providing more up front margin on HP products including HP's popular ProCurve line.

    LaRocca, vice president, marketing and strategy, Solution Partners Organization, Americas, was at Everything Channel's XChange Solution Provider conference urging partners to sell more of the HP product portfolio. At the same time, HP is poised to close its $2.7 billion acquisition of networking product provider 3Com.

    HP's ProCurve push combined with the 3Com acquisition is part of a no holds push to take market share from networking leader Cisco.

    Here are excerpts from the question and answer session with LaRocca.

    What are we going to see from PartnerOne to help HP partners be more successful selling networking products like ProCurve against Cisco?

    ProCurve was one of the first groups that came to us and wanted to take some of their back end (rebate dollars) and put it in the front end. They wanted to be very, very focused on the resellers in the marketplace and the reseller reps to capture their mind share.

    So they were one of the first ones that actually helped build out the strategy for us on how we were going to go to market with front end benefits on the (HP ProCurve) deal registration program.

    You are going to hear more and more from us about ProCurve. Obviously I can't talk about the whole 3Com (acquisition) because it is not a closed deal yet. But that is huge in the marketplace. That is going to be a big impact for us in the networking environment. That is going to bring a level of products and solutions that are going to be new to the ProCurve guys.

    So are we going to see a lot of help and investment from HP PartnerOne for VARs that want to sell against Cisco up and down the networking stack


    How big a priority is that for you?

    It's a big priority for us. Absolutely.

    What ultimate impact is it going to have on VAR's profitability that sell HP networking (products) versus Cisco?

    Well I think if you talk to our ProCurve networking guys out there they will tell you they like the program. They are very much in favor of the direction that we are going. They like the fact they are getting their money up front in some of these deal registration benefits. Their growth tools are on the back end. They like the investments. I think they like the direction we are going with ProCurve.

    Talk about what specific changes are you making to make sure partners are rewarded for selling the full portfolio?

    Obviously, PartnerOne has many different facets to it that work in their favor if they want to make investments with us across the portfolio. So if you're a partner selling today desktops and notebooks and you want to get into the server market which is sort of a logical progression for them there are investments there. There are deal registration investments. There are training investments. There are programmatic investments. There are growth tools.

    Let's say you are an Elite in our blade category and you are not really selling our notebooks; You are selling someone else's desktop and notebooks. If you are Elite with us in blades you automatically get into the PSG (Personal Systems Group) growth programs. So you are going to get investments with us at the beginning of your sales cycle with the PSG products.

    You are going to get entry into the growth tools. You don't have to hit any revenue bars for PSG. You simply gain entrance because you are a valued partner in a different part of our product solution set. That is one good example of how we take partners who have a core competency in one area and work with them to build one out in another area.

    When did you start doing that?

    We've been doing that for six months.

    Are you doing the same thing with IPG (Imaging & Printing Group)?

    Yes. If you gain entrance into an Elite program with HP and that was your entry into PartnerOne you now can take advantage of the other growth tool programs that are in there from the other business units.

    How many elite partners do you have across the product lines?

    There are several hundred Elites when you stack them up altogether across all the product groups.

    Those are the ones we are most invested with. Those are the ones who are very invested with HP and we are highly invested with them.

    Have you had partners that have changed their product mix based on the PartnerOne incentives?

    I wouldn't call it changing their mix. I would call it increasing the breadth of their offering. So they have added another core competency or another solution to their expertise so to speak with the end users. They may have been very storage and server centric and going to market with that core competency and now they are offering a wider breadth of our products in different areas because of the investment we have made with these folks.

    Next: LaRocca Talks About The Push To Get Partners To Sell More Of The HP Portfolio

    Talk about the move to get partners to sell more of the HP product portfolio?

    We encourage the resellers to be selling across the portfolio. We want to bring in one reseller who can sell across the portfolio rather than having multiple resellers into that end user. It is better for HP. Then we have got one reseller selling across our product groups. We can hold them accountable. We can create some growth elements there and do account planning.

    How many partners are selling the full HP Product portfolio today versus a year ago and how many will be selling the full portfolio a year from now?

    I would tell you that we have a lot of partners that sell across the portfolio.

    I think it is a fair statement to say that we have more partners today selling across the portfolio than we had a year ago at this point in time. That would be a fair statement and we can verify that through the number of people that gained admittance into growth goals that didn't have them before.

    What is your message to partners who sell more of the portfolio?

    They are going to see more investments from us as they sell more and more of the portfolio and they will get to participate in a lot of different investment vehicles from us. Not only investment vehicles, but training vehicles, certification vehicles. All of these things lead to growth and profitability for these partners.

    Do you think we are going to see a shift here where solution providers that step up and sell the full portfolio are going to become more profitable and see more growth?

    I do because they are going to have more opportunities afforded them. Take a reseller that is doing well with our servers and notebooks how many printer opportunities is he tripping over trying to get to the boardroom in every one of these customers he is meeting with? Is there a managed print services solution inside that customer? Probably unlikely. Take Denali Advanced Integration for instance. Two years ago they weren't in the printer business at all. Now they are in the managed print service business and they are really seeing opportunities in that. They are seeing growth in that business.

    Talk about other changes you have made to PartnerOne to help partners?

    One of the things we have done in the last couple of quarters is we have balanced more of our investments front end and back end.

    So I would say if you looked at our history maybe a couple of years ago we were primarily a back-end focused investment PartnerOne program strategy. Now we are much more balanced. There are a lot of different reasons to do that. One of them is giving some of these smaller partners money on the front end versus giving it to them on the back end. That is a cash flow incentive for them. So it is a benefit. And obviously somebody like a CDW it may not have that huge of an impact on. But if you are one of our thousands of partners out there cash flow has a big impact.

    It also affects profitability at the deal level. We know that many of the partners pay their reps and compensate their reps on deal profitability. This allows us to compete more effectively out there in the marketplace.

    Was the majority of the PartnerOne program back-end (rebate) focused before this?

    It was a majority back-end focused. Now I would offer up that we are much more balanced. I think at this point in time we like where we are. We have talked to many of the partners. We will continue to make tweaks or changes as the competitive market out there makes sense for us. If we get driven to something because of a competitive change in the market or because growth or some other element going on out there forces us down a path we can look at that. But right now I think we have a good balance.

    That's a major shift you have made ahead of other guys. What impact has it had on competitors?

    I think we forced other people's hands out there in the marketplace with a change in their structure and their strategy and how they pay off benefits.

    When we drive and develop these initiatives we don't do it in the vein of changing the landscape of the competition. We do it in the vein of what is going to get growth for HP and our partners. How are we together going to go out and grow the market in different segments and different verticals and such.

    We meet with these guys on many, many occasions. We did over 50 (HP CEO) Mark Hurd roundtables (with partners) last year. Over 50 that is average of one a week. For a Fortune 9 CEO to get in front of that many partners and spend that much time and this year we'll do more than that provides us a lot of bidirectional feedback. We're able to get a lot of good information and solidify strategies and such and determine where we need to go.

    That is a big tool for us. Not only do we do that with Mark Hurd we do it with the rest of his staff.

    How many of those roundtables with partners will Mark Hurd do this year?

    I don't know but it will be more than 50.

    Talk about the changing PartnerOne deal registration dynamics.

    We have primarily focused our front end investment changes to our deal registration programs. So each business unit has a deal registration program that caters to specific terms and conditions for that particular business unit. And that is where we have really changed our focus there. That not only provides better cash flow for the partners but it also drives right to the heart of the profitability of the sale. It catches the sales rep's attention. And he is going to get paid on margin in most cases and the front end incentives make sense.

    Where has that front-end incentive paid off in higher market share?

    Servers. ProCurve. Notebooks. We are experiencing growth in all those categories right now. And all of those categories now have front end deal registration programs.

    Give an example of how that works with a VAR?

    A VAR goes into ACME Furniture and finds a notebook deal and goes on and registers the deal as a new business opportunity.

    If it qualifies as a deal, then, when he closes that deal he gets the discount up front. He doesn't have to wait x amount of weeks on the back end to receive a check from HP. He gets it up front as part of the deal.

    Are VARs giving away that margin?

    The responsibility of managing margin is on their shoulders. They would really have to make sure that this didn't fall to the Street. In other words they would be taking front-end dollars and giving it away in a margin deal. They have to be much more conscious of this. They have to be more responsible about how they are pricing out the product. It does put that responsibility on their shoulders. But in turn they get much quicker access to the money.

    Not All Stock Factors Are Created Equal — Even When They Have the Same Name | real questions and Pass4sure dumps

    Photograph by Adrien Olichon

    Text size

    Stocks with certain characteristics—such as a smaller market cap, lower valuation, or better profitability—are believed to outperform over the long run. But building a portfolio based on these characteristics—or “factors,” in industry jargon—can be tricky, since any variation in the process can lead to vastly different basket of stocks and performance patterns.

    “Clients would call and say, ‘You’re saying value did well this quarter, I think value did poorly,’” says Melissa Brown, managing director of applied research at Axioma, an investment-management solutions firm. Where did that disparity come from? Things like the underlying investment universe, frequency of rebalancing, and the ability to short can all make a big difference in the seemingly similar factor strategy, according to recently published research from Brown.

    To start with, many strategies select stocks simply by ranking them on the desired factors, but don’t have any risk constraints. The problem with that, says Brown, is that the portfolio might be exposed to many other factors at the same time, which could skew the results and investors’ assessment of the desired factor itself. “A standard ‘off-the-shelf factor’ may not be providing the expected exposure, could therefore overstate or understate achievable returns,” wrote Brown in the study.

    One good example is during the 2009 financial crisis, when the quality factor seemed to fail badly. Buying the top quintile of stocks with highest profitability and selling those with the lowest profitability within the Russell 3000 suffered a 21.2% loss for the year, while the broader index actually increased 27.6%.

    However, this shortfall was mostly because the portfolio tilted heavily toward stocks that had been doing well—or the momentum stocks. “When the market turned around in March that year, the stocks that had good momentum going into that period got pummeled, and that was responsible for a big portion of the [quality portfolio’s] negative return,” wrote Brown in an email to Barron’s.

    The high-profit portfolio also contained more expensive and low-beta stocks at that time, according to Brown. During the market recovery in 2009, cheap and high-beta stocks outperformed the expensive and low-beta counterparts, and high-profit companies suffered from the bad bets. After minimizing the exposure to all these other factors, according to Brown, the “pure” profitability-driven portfolio actually gained 0.5% for the year.

    Even when controlled for risk exposure, the same strategy can still work out quite differently depending on which investment universe it is applied to. Buying high-profit stocks and selling low-profit stocks within the Russell 3000 returned almost 5% in 2016, but when the exactly same methodology was applied to the Russell 1000, it lost 0.5%. “This suggests the factor fared better among small stocks,” wrote Brown.

    That’s not always true, though. Things actually turned around quickly just one year later in 2017. The portfolio based on the Russell 1000 returned 7.7% in the year, while the one for Russell 3000 only scored 1%.

    Whether a portfolio has short position can also make a big difference in returns. Even within the same Russell 3000 universe, the strategy without bets against low-profit stocks fell 2.3% in 2016, much worse than the 5% gain from the strategy that plays on both ends. But again, in 2017, the long-only portfolio outperformed the long-short one by 2.3 percentage points, flipping the trend from the previous year.

    When one factor can spin out so many different versions, the devil is in the details.

    Write to Evie Liu at

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    HP HP2-Z05 Exam (Selling the HP ProCurve Portfolio) Detailed Information


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