Chanos still short H-P, continues to like Apple/Samsung

H-P's (HPQ -1.9%) market-pleasing analyst day guidance (I, II) hasn't made Jim Chanos less bearish about the IT giant. "They're talking about margins improving. I'm just hard-pressed to see how margins are going to improve in any of their businesses given the secular headwinds that are going on."

Chanos, who has been short H-P for more than a year - his bet did well in 2012, but hasn't done so in 2013 - declares the company's PC, printing, and enterprise ops to all be "under assault." "Turning around tech companies - IBM in the early '90s notwithstanding - is a very difficult undertaking."

Likewise, Chanos remains long Apple (AAPL +0.8%) and Samsung (SSNLF.PK, SSNGY.OB), viewing them as mobile offsets for his PC shorts. "[Samsung] is outright, outright very, very cheap ...  unlike a lot of guys like Hewlett and others who go out and acquire their R&D ... Samsung actually does it homegrown. As does Apple basically."

Chanos also discloses he's now long cloud HR/ERP software vendor Workday (WDAY +3.9%), using it as a hedge for an unnamed cloud software short he calls "an accounting nightmare."

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Comments (8)
  • Jay Schembs, CFA
    , contributor
    Comments (148) | Send Message
    I'd bet dollars to doughnuts the WDAY position is hedging a CRM short.
    10 Oct 2013, 01:40 PM Reply Like
  • aardvark3
    , contributor
    Comments (676) | Send Message
    10 Oct 2013, 02:00 PM Reply Like
  • 2puttwo
    , contributor
    Comments (656) | Send Message
    I'll bet you doughnuts to dollars you're right Jay, that was my first thought too. Need to go make a trade that's been on my mind for a while concerning CRM.
    10 Oct 2013, 02:04 PM Reply Like
  • jjkiam
    , contributor
    Comments (403) | Send Message
    Hard for me to fathom the incredible negativity surrounding Apple. The market is way up today and Apple barely above where it opened. The amount of effort l that goes into shorting this stock every day amazes me. As soon as it goes up by 4-5 bucks the sell orders pile in attempting to drive the price down. Clearly this stock is a favorite of hi volume algorithm traders that do this. I don't think it can break out of this manipulation even with the current buyback attempting to support the price. Sad but it is a great poster child of stock manipulation and why the market is rigged by the very big players
    10 Oct 2013, 02:20 PM Reply Like
  • Zeus2012
    , contributor
    Comments (714) | Send Message
    CRM won't crack until Fidelity decides to sell (triggered by a mistake by the company). Until then, it'll be like his short on China (i.e., he may be right but god know how long it's going to take to prove it).
    10 Oct 2013, 02:44 PM Reply Like
  • Stan Ackman
    , contributor
    Comments (1927) | Send Message
    Just wonder why folks like Chanos concentrate on short rather than long. 8 of 10 years he is likely to underperform the market. So, for a return aspect, there is no point of doing so. Does he just feel so good when destroying things?
    10 Oct 2013, 03:07 PM Reply Like
  • kevinirl
    , contributor
    Comments (3) | Send Message
    I question his short instead of long game view here. Also where does he get the idea Hewlett goes out for R&D it has a huge in-house R&D in some sections of the business.
    11 Oct 2013, 07:44 AM Reply Like
  • SapientInvestor
    , contributor
    Comments (146) | Send Message
    I saw that Chanos was long Workday a while back and was very puzzled. Now it all makes sense. He is very likely short CRM. He's hedging because of what happened to him with AOL.
    11 Oct 2013, 10:36 AM Reply Like
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