This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Enterprise Stocks: A Year in Review

Stocks in this article: CRMWDAYORCLIBMAMZNACNTIBXHPQMSFTCSCO

Although I'm willing to credit CEO Meg Whitman for her "real world" style of leadership -- meaning she never pretends HP is better than it is -- she recently told analysts to not expect growth in 2014. It's true the company is working its way back and is in a so-called five-year turnaround plan. But she said this less than a year after she had promised investors that HP would return to growth in year three of her turnaround plan. Well, 2014 is year three.

That the stock didn't get hammered despite the broken promise suggests the Street always assumed Whitman was shooting for the stars. Even so, I would be careful buying this stock after such strong gains. While HP continues to be a nice sentimental story, all of the "easy money" has already been made. With demand for personal computers expected to reach record lows in 2014, HP will be judged more on its revenue stream and less on its cost-cutting ability.

In many respects, this is why Dell left the spotlight and opted to go private after shareholders approved Michael Dell's $25 billion bid. Finally out of Wall Street's scrutiny, Dell says it plans to re-emerge as a legitimate tech power. But I'm not holding my breath believing Dell has learned anything over the past five years given Michael Dell's proclamation that the company has no interest in the mobile phone business.

Instead, the company is keeping its promise of pursuing growth in the enterprise. To that end, I just don't see how this company can be taken seriously as a worthwhile turnaround candidate. With no organic growth to speak of, Dell needs to think differently. This is something Oracle now understands, given the company's new partnerships with some of its most hated rivals, including Microsoft (MSFT) and Salesforce.com.

Despite the punishment Oracle has taken in 2013, management understands the company's total addressable market, which also includes software, hardware and services, has begun to take drastic changes. As with Cisco (CSCO), Oracle has been working to diversify its business. This is why Oracle's $2.1 billion acquisition for Acme Packet and then network vendor Tekelec deserve more time. And I believe Oracle will be well positioned in 2014 to outperform.

With only moderate improvements in global IT spending, I believe enterprise stocks performed as well as expected. Let's not forget several of these giants, including Cisco and IBM, rely on the U.S. government for a significant portion of their revenue. Despite the government shutdown and the sequestration that occurred early in the year, management was able to overcome the impact.

That said, expectations will be higher in 2014. Any "pass" that was granted this year to the likes of HP will  certainly be met with greater criticism next year.

At the time of publication, the author held no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,718.24 +40.34 0.24%
S&P 500 1,953.74 +2.92 0.15%
NASDAQ 4,463.0780 +10.2860 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs