“If we are in the middle of the Apple Inc. Renaissance, then we are also in the middle of the Dark Ages of Dell Inc. and Hewlett-Packard Company,” Brian Tracz writes for Insider Monkey. “And I am not merely drawing a metaphor to the overall market sentiment. Both of these companies had a game plan for a future devoid of tablet and cloud computing. And now is the time of reckoning.”
“Legendary short-seller Jim Chanos recommended Hewlett-Packard Company (NYSE:HPQ) as a short sell idea, calling the company a ‘value trap,’ and share prices have only decreased since that interview earlier in July,” Tracz writes. “At roughly the same time, Tiger Cub Phillipe Laffont likened HP to Eastman Kodak Company — a comparison that should send chills down the spine of HP investors.”
Tracz writes, “Things are not much better for Dell Inc. David Einhorn claimed in the fourth quarter that Dell’s P/E ‘reflects a valuation usually associated with collapsing businesses.’ As his fund Greenlight Capital exited the position in the second quarter 2012 at a loss, Einhorn said the Dell’s businesses ‘proved to be a disappointment.’ …According to research firm Canalys, HP underwent a 11.3 percent decline in PC sales year-over-year in the second quarter 2012, and Dell did not come in much better with a 10.9 percent decrease. When gross PC sales increase 12 percent overall, these declines are problematic. I should mention that Apple Inc’s PC sales increased 60 percent in the same period.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “James M. Gross” for the heads up.]