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Let's be clear up front: I'm not expecting a bankruptcy from either Hewlett-Packard (HPQ) or Dell (DELL). But I do think it's very possible that one, or both, could be broken up and sold for parts, so now is a good time to see what those parts might be worth and whether the ultimate fire sale is avoidable.

Forced to buy one stock or the other right now, I would opt for Dell. I think it has done a better job of managing the enterprise downturn and that the old Perot Systems unit remains viable, while HP just wrote off its entire EDS business. I think Dell's software sales have been relatively modest and strategic, while HP's have been enormous and helter skelter. And I wouldn't want to own a printer company right now.

But in general the two companies have a lot in common. The cash flow comes from PCs, a business that continues to circle a black hole of loss. ("Circle the drain" is too common a metaphor.) Both went big into enterprise services at about the same time, both have moved strongly into software, and both claim to have cloud strategies built around OpenStack.

It's likely that HP has a bigger and better client list than Dell, but given the devotion of both companies to Microsoft Windows, you can easily move between the two. Dell is much, much smaller in terms of market cap -- $21.7 billion against $39.7 billion. That's a Dell advantage, because bigger companies move more slowly, and often have more dead assets to clear away.

Over the last year shares in the two companies have moved in virtual lockstep, with Dell down 11.7% and HP down 14.7%. But that actually masks HP's somewhat better success in 2009 and 2010, when HP was actually ahead of its 2008 highs while Dell scraped along near its 2009 bottom.

James Rogers writes at TheStreet not to "expect any miracles" when Dell reports earnings later today. HP reports tomorrow, and estimates there are equally modest.

Buyers of HP shares may think it has a ready market for its PC and printer business in China's Lenovo Group (OTC:LNVGF), but I would not be so certain. Given Dell's aggressive moves to source in western China, where costs are lower than near the coast, I might think Lenovo might prefer to buy Dell's PC business. Or it may not care -- Lenovo is joining the rush to mobile.

Does HP even have a mobile strategy? Does Dell? Both are tablet also-rans, and there's no evidence either is going to be a serious player there either.

My guess is that one of these companies is going to find a viable cloud strategy. If HP bought one with, say, Rackspace (RAX) that might be a game changer. But the company has proven unable to profit from past acquisitions, which would make any smaller company leery of anything but a straight take-out, as in you give me money and I walk away. In fact, I'll conclude this with a prediction, that an HP move for Rackspace might be the best news Dell could receive as it could easily move Rackspace's best people up I-35 and gain the benefits of a purchase for practically nothing.

This is one of those stories where I have a lot of thoughts but few conclusions. If you had to buy one of these companies tomorrow, which would you buy and why? You know my thoughts -- what are yours?

Discalimer: 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.

Source: Is Hewlett-Packard Or Dell More Likely To Survive?