Hewlett-Packard has become more or less like a big cyclical company that can do well if things get better and won't do that badly if things get worse. If there is gigantic activity worldwide that requires more information technology spending, then it might be a better bet than Oracle (ORCL) or Intel (INTC) or Microsoft (MSFT) or IBM (IBM), and certainly better than Western Digital (WDC) or SanDisk (SNDK) or Seagate (STX), because it can control more of its own destiny.
It's basically a gigantic chit in the tech game for those who want to take on a little risk and recognize that there may not be a lot of reward but that the skew is toward reward, after what Meg Whitman has done in the last year. There is a first-class nature about the products that Hewlett-Packard offers, especially printers, but also basic enterprise hardware, and it is still a trusted name. Just as there will always be demand for personal computers and bigger servers, there will always be demand for the stock of Hewlett-Packard.
The best reason to like Hewlett-Packard, though, is the balance sheet. It's miraculous what you can do if you can fire people faster than revenue drops. It allows you to sock in cash and then look around and see where and how you want to grow. Whitman will soon have many choices to make. That optionality, too, isn't yet reflected in the $27 price.In a world starved for big-cap companies that offer consistent opportunities and a turn in growth, Hewlett-Packard will now be front and center. Is it for me? I am more of a Google (GOOG), Apple (AAPL), Xilinx (XLNX), Salesforce.com (CRM), Adobe Systems (ADBE) guy, going for innovation and next-generation growth. But there are plenty of people who want a solid name in the portfolio and are sick of Oracle, Cisco (CSCO), Microsoft and IBM. This is the one they will go to. Random musings: Happy Thanksgiving to all! I will be huddled with family every chance I can get, but I love the turn here at TheStreet and at Real Money, and I am thrilled and thankful to be about to sign on for four more years with our great institution. Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long AAPL and ADBE.
Editor's Note: This article was originally published at 10:09 a.m. EST on Real Money on Nov. 27.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV