Alex Salkever's  Instablog

All the noise from new CEO Carol Bartz to the contrary, Yahoo! is in trouble. Display ads are increasingly viewed as weak offerings in the online space. Ironically, online news aggregator Digg may save Yahoo! and its display ad cohorts.

Hewlett Packard (HPQ) has lagged other technology companies in the last two months as tech has surged. The company reported an awful quarter on May 19 after the market closed. CEO Mark Hurd reported earnings that were roughly in line but guided revenues for the ongoing quarter strongly downward, dismaying analysts and investors.

On the news Shares fell $1.88 to $34.70 in after-hours trading. For HP,  second-quarter net income declined to $1.72 billion, or 70 cents a share, from $2.06 billion, or 80 cents, from a year earlier. A litany of grim numbers came with the quarter including a 19% decline in PC sales revenue, a 23% decline in printer supplies and sales revenues, and a 28% decline in sales of at the storage and server unit. The company cautioned that sales would decline further in the current quarter. The Piqqem Sentiment on HP is running at neutra. Has the much praised CEO Mark Hurd lost his golden touch? No doubt, he's gettting hammered but now is an interesting time to think about whether HP is a good portfolio addition. Here are three reasons why the future may not be as dire as the markets perceive.

1) Server and storage business is highly leveraged to any economic recovery. HP has very solid sales teams in these areas and its consulting arm does an excellent job of pushing HP enterprise hardware. In the fall of 2009, as the economy starts to recover, sales at this unit will serioiusly perk up. Storage, in particular, is a non-negotiable buy in the era of HIPAA, Sarbox, heavy medial loads, and mandatory system archiviing.

SUMMARY: Piqqem Sentiment for Apple (AAPL) increased overall by 6.5% since the last report on March 24, 2009 and has been rebounding for the past month. The eastern half of the country appears to moving strongly upward in sentiment for Apple as does software engineers, women and managers. Apple sentiment has not recovered from a high of 2.96 (on a scale of 0-to-4) in February three months ago. Apple sentiment declines have been less pronounced than those of other PC-related companies. In the smart phone category, competitors Palm and Nokia have actually outpaced Apple with significant sentiment increases as compared to Apple’s decrease over that period. That said, both were starting from a much lower sentiment base and neither has crossed into positive sentiment territory above the 2.5 mark. In contrast, Apple has never fallen below 2.5 and has retained consistently more positive aggregate sentiment ratings than peers in both groups. That appears to be continuing, in light of the recent upswing in Apple sentiment.

Sub-Crowd Breakdown of Apple Piqqem Sentiment

In the age-specific sub-crowds, sentiment increased most strongly among 18-to-29 year olds (5.5%) and 44-to-59 year olds (13%). In the regional sub-crowds, sentiment increased markedly in the Northeast (18.5%), the Midwest (16.5%) and the South (12%) but less so in the West (4%) where Piqqem has the largest user-base. Broken down by profession, sub-crowd sentiments increased the most for management (10%) and software engineers and financials professionals (4.5% for each group) while declining for salespeople (-7.5%) and students (-6%). Curiously, Apple sentiment optimists grew more pessimistic in terms of Piqqem Sentiment (-16.5%) and pessimists grew more optimistic (25%). Women’s sentiment for Apple improved by a dramatic 54.5% (women represent a minority sub-set of users so have less impact on overall sentiment swings.

As everyone knows, the Amazon Kindle 3 is coming and lots of folks are hopped up about the new toy from eCommerce giant Amazon (AMZN). Surprisingly, Piqqem.com users are voicing slightly bearish sentiment trends on Amazon even as the company ramps into launch of its much anticipated 9.7 inch screen Kindle on Wednesday of this week. On a scale of 0-to-4 (with four as highest), Piqqem Sentiment for Amazon has declined moderately by six basis points over the past month, from 2.54 at its most recent high point in mid-April to 2.49 as of market close on May 4. While this means Piqqem users still view Amazon shares in a largely bullish light (above the neutral mid-point on the scale of 2), any negative trend in the sentiment line is a negative for the stock.

Apple (AAPL) will report earnings after closing bell today. Various concerns include Steve Job's health, reports of declining sales figures for Macs, and release dates for next generation iPhones as well as deals with Chinese mobile carriers. Piqqem Sentiment on Apple has trended down by 32 basis points since Feb. 21, from a 6-month high of 2.98 (on a 0-to-4 point scale with 0 as lowest) to 2.66. That level remains bullish but such a strong downward trend may fortell earnings that are inline at best.

McDonalds Corp (MCD ) reports its earnings for Q1 2009 before markets open on April 22. Piqqem Sentiment for shares of MCD has dropped from a six-month high of 2.82 (on a 0-to-4 scale with 0 as lowest) to 2.64, a significant drop of 18 basis points. In comparison, according to First Call analyst sentiment for the fast food chain has dropped roughly 6 basis points, from a rating of 2.06 (on a 1-5 point scale with 1 as highest) to 2.0 over the course of the last 120 days. Analysts appear to be more bullish than the general crowd at Piqqem. However, sell side analyst sentiment has been shifting to meet the general crowd sentiment.

There are clearly some challenges facing McDonalds. Key competitor Burger King (BKC) reported weak March sales. Starbucks is mounting a sustained effort to stem any market share losses in the premium coffee markets to counter McDonalds' successful McCafe push. Additionally, further increases in the value of the U.S. dollar relative to other currencies could hurt McDonalds due to is relatively greater reliance on growth from outside the U.S. McDonalds executives have restated optimism for 2009, saying that sales in January and February have been solid and international markets such as Brazil and China are performing strongly. The company has an exceptionally strong track record. However, if McDonalds misses whisper estimates share holders may punish the company due to higher expectations expressed in the recent upward momentum in the stock, as it rose from the $51 range to the $56 range.