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Sell Infosys, Buy Intel and Yahoo!

NEW YORK (TheStreet) -- First-quarter earnings season officially kicked off Tuesday when aluminum giant Alcoa (AA) reminded investors that good companies don't stay down for very long.

This week we will get reports from three companies that can appreciate Alcoa's ability to navigate a drastically changing industry. These three have had their own battles with, among other things, a fiercely competitive environment and a market that wants proof they can deliver the goods.

Infosys (INFY - Get Report) has struggled amid a difficult enterprise spending environment to drive higher IT consulting services despite the company being arguably better managed than most of its rivals.

The concern has always been whether Infosys has enough oomph to overtake IBM (IBM) and Accenture (ACN) when spending does recover. Infosys reports fiscal second-quarter results Tuesday.

The Street will be looking for 80 cents in earnings per share on revenue of $2.12 billion, which would represent a year-over-year revenue increase of 9.5%. While 9.5% jump in revenue is relatively impressive, this has never been the issue impacting Infosys. Rather, very little of that revenue has trickled to the bottom line.

To that end, with earnings-per-share expected to growth just 2.5% this quarter, management continues to struggle to raise the company's market position. Until the company shows more action and less reaction, I don't see much upside potential to these shares. The better option in this space remains IBM.

For a similar reason, Intel (INTC - Get Report) has been overlooked. The company is perceived as inadequate in the realm of mobile devices. Compared to, say, Qualcomm (QCOM), I have to agree. But Intel, which still has world-class technological and manufacturing capabilities, has not been asleep at the wheel.

Management has cited these operational advantages as a means to grow long-term value. This, however, has not done enough to quench investors' obsession with quarter-to-quarter performances. When Intel reports first-quarter earnings Tuesday, management must convince the Street it deserves more time execute its vision.

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