The last time that I looked at Hewlett-Packard [stckqut]HPQ[/stckqut], I rated the company a Fair company and encouraged you not to buy it. I haven’t rechecked the numbers since then but the recent news of Hewlett-Packard buying 3-Com begs the question, does this acquisition invoke the rule of not buying a company that just recently changed its size due to acquisition or divestiture?
The quick answer is no. According to Reuters, 3-Com had quarterly revenue of 290.5M and HP had revenue of 27,451.0M. Since 3-Com is less than 10%, HP should have little trouble absorbing the smaller company without affecting its major operations.
Remember, the magic number is 10%. If it goes over that number, stay away for awhile.