The Sacred Cows Of Seeking Alpha

Includes: GE, HPQ, INTC
by: Dana Blankenhorn

In the two years I've written for Seeking Alpha I have witnessed a lot of great action and great discussion.

Some of that discussion has led me to profit, and for that I thank you. But I have also found there are some stocks that might best be called sacred cows. Criticize them and you can expect a rain of hellfire from the commenters. Yet they remain stubbornly poor investments.

The three most obvious to me are Hewlett-Packard (NYSE:HPQ), Intel (NASDAQ:INTC) and GE (NYSE:GE). They are all great companies, with great histories, and for some investors they may good investments. If you want to bet on a turnaround, try some HPQ. If you're looking for yield, INTC is the place to be. If you want a nice widows-and-orphans stock, something you can stick in a drawer and forget until the kids graduate from college, I think GE is a buy.

That said, I can rely on the same feedback when I write about any of these companies. All is well, all is about to be great, stay strong and you will be rewarded.

This is most pronounced in the case of Hewlett-Packard. Whenever I make a bearish case, as in this story from November or this more recent piece, the same kinds of comments appear, and in a similar number each time.

I don't want to pick on anyone, but this bullish comment is typical. "HP is actually one of the largest "cloud" companies in the world. Cloud computing is not strictly "public cloud". It also includes private, and managed cloud computing. HP is the only company I know of that has offerings in all three areas of cloud computing."

I don't know where to start with comments like this. A big client-server system is not a cloud. It's just not. A cloud system is based on a cloud infrastructure, it uses both virtualization and distributed computing techniques to deliver low costs, and it's usually based on industry standards, often using open source. Google is a cloud. Amazon is a cloud. HP - not a cloud. Although they're building one, and they say they'll build you one, based on existing technologies they have contributed very little toward creating.

Show me. Show me the money. Show me the revenue. Show me something real, when it comes to such a claim. Or leave me alone.

The same is true for Intel. I was once a big Intel bull, but I can no longer believe in the company because it has sat and done nothing for me for over a decade. Their problem lies in devices, where they have yet to really address a problem I first saw a decade ago, the fact that device makers want to specify chips based on their own requirements, and demand that the chip be designed around the device, not the other way around.

So last month, when Intel TV came around, I predicted a failure. Based on the company's track record. Yet, again, not to single anyone out, I got comments like this: "They know OEMs want solutions, for heaven's sake." So why aren't they winning more deals, for heaven's sake?

I finally bit the bullet last year and sold my last INTC holdings. I bought some ARM Holdings (NASDAQ:ARMH) instead. I made money on ARMH, and INTC is still down. To me, that's the bottom line. Winning or losing money for me, no one else, is what counts.

The last is the hardest to take, because I still have 300 shares of GE. Here, I must say mea culpa. I keep pounding the table for GE, as in this story from last year and this one from the holidays, and I get the same attaboys in response.

Again, not picking on anyone, not identifying them. "GE will be my first purchase." If you're just coming out of college, if you just opened your IRA, if you've just got $4,000 and hope that it someday becomes $8,000, I say go for it. But each time the stock looks like it's ready to break out, it goes back in the corral and locks the gate behind it. Today it's buying Lufkin Industries (NASDAQ:LUFK) for a below-market multiple of about 13.5, and the stock is down a few pennies.

See, I can follow a sacred cow down the bridle path as well as any man.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.