Filling Eyes With That Hewlett And Dell Double Vision

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 |  Includes: DELL, HPQ
by: Marek Fuchs

There is no disguise for that double vision, at least when it comes to Hewlett-Packard (NYSE:HPQ) and Dell (NASDAQ:DELL). Both report earnings in short order -- Dell today, Hewlett tomorrow -- and both are, against good judgment and reason, rising this morning in the lead-up to their earning releases.

Want to stick around there until you can't see straight?

Dell, for its part, has made a recent habit of disappointing and Hewlett-Packard's quarter will undoubtedly be messy, what with a charge for Electronic Data Systems the size of Bolivia just to start things off. In terms of acquisitions, by the way, Dell won an expensive $2.4 billion bidding war for Quest this quarter. History will be the judge of whether or not it will go the way of EDS.

But beyond the sordid history, the currently fractured state of business, precise level of expectations or tenuous future, here's what we know:

Both Hewlett-Packard and Dell are in a state of attempted transformation. They are trying to remake themselves in an image that is, well, like anyone but their own. They both want to wake up one morning in their beds transformed into IBM (NYSE:IBM) or Apple (NASDAQ:AAPL). Anyone but themselves. So they toy around with everything but consulting to tablets. And they acquire, then write-off.

Total transformation, from the high school lunchroom to high finance, is nearly impossible. In terms of high finance, there was IBM, which did a good job. Then there was ... well, if you can name another, please do. Starbucks (NASDAQ:SBUX) revived itself, but really only had to tweak itself out of the bad habits of lost focus, slow service, and overexpansion. Its basic business -- selling coffee at an obscene profit margin -- was sound.

Not so here, which means it's not going to be easy for Dell or Hewlett -- and you should never ever buy either on a hunch in the prelude to their earnings. Even in the best-case scenario, a turnaround is going to be long and messy for both.

Don't let double vision get the best of you.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: 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.