I haven't been a huge fan
of Hewlett-Packard Company (NYSE:HPQ)
. But I have to say that the level of criticism that I've received for my article this morning
posted on TheStreet
, caught me a bit by surprise. I felt I was more than fair – if I should say so myself.
But what seemed to have gotten under the skin of my readers (among other things) is my having said that Hewlett-Packard Company (NYSE:HPQ) took a step backward. Look, with virtually every segment reporting a decline this quarter, I don't know of a better way than to say that what seems like progress continues to be stunted by underlying inefficiencies in execution.
And contrary to what the HP-Bulls wish to believe, the company's CEO, Meg Whitman, is no closer to turning things around
than she was last year. By contrast, take, for instance, Yahoo! Inc. (NASDAQ:YHOO)
- I mean, how long did it take Marissa Mayer to get what was once a dormant company back on the right path? And I don't believe that the performance standards
need to be different for Hewlett-Packard Company (NYSE:HPQ).
I don't think that anyone can take look at this company objectively and say with any degree of confidence that Hewlett-Packard Company (NYSE:HPQ) is heading in the right direction. I mean, even to this day, the company's management has failed to convey that they know what that direction really is. I hear the term "mobile" being tossed around every quarter. And unsuspecting investors get excited and bid the shares up. But it was Microsoft Corporation (NASDAQ:MSFT)
, not Hewlett-Packard Company (NYSE:HPQ), that bought Nokia Corporation (ADR) (NYSE:NOK)
HP, on the other hand, continues its perpetual restructuring approach that has gone on ever since Mark Hurd was let go. The stock, meanwhile, has lost 53% since then.
It's as if mediocrity has become accepted
. And my article was – in essence – raising the bar. I respect that many of my readers didn't appreciate it. But I'm willing to engage in any debate to point out ways to improve the company.
But here's the thing; after saying all that, I do think the stock is slightly undervalued. It's only trading at 6 times fiscal 2014 estimates, which suggests that Hewlett-Packard Company (NYSE:HPQ) won't grow at all. But as I pointed out in the article this morning, I believe that $25 per share seems easily attainable. I just believe, however, that even with HP's decent dividend yield of 2.6%, that there are better alternatives out there.
Author Disclosure: At the time of publication, the author did not hold any stock in the companies mentioned.