What's Mark Hurd worth? Who cares?
Instead of judging Hewlett-Packard's stock by the value of its outgoing CEO, look at the strength of the company itself.
By Jim Cramer, TheStreet
How much is Mark Hurd worth? I know that's the question people will use to determine what they will pay for HPQ.
I think that's the wrong question. The right question is how much is HPQ worth, and for that it's pretty simple: It's worth more than one times its growth rate, where it stands if Friday's closing price were to hold.
I can't say Hewlett-Packard (HPQ), the stock, has been on a roll. It's been afflicted with the same atrocious action that almost all techs, with the exception of NetApp (NTAP), F5 Networks (FFIV), VMware (VMW) and Salesforce.com (CRM), have been victimized by. I can't even include Apple (AAPL) right now in the "up" stock quotient, because it's been stalled, although I think it's about to break out.
HPQ's stock, like many others in the cohort, has been held back by foreign-exchange translation. But I see the euro going to $1.38, which will make fourth-quarter comparisons much less onerous, plus we are seeing the strength of Northern Europe kicking in.
The consulting business has been a good one, though not as good as Accenture (ACN), which may turn out to be the real winner here, as HPQ may lack "the fire" during this interim. But it certainly has been a great call to get a one-stop HPQ store going for the enterprise, something Apple lacks to date.
Here are the two issues I see as difficult for HPQ, calling into question whether it can return to $48, where it was, I believe, before the news began leaking out:
- Can anyone cut expenses as well as Hurd? He is the master at it.
- Can the new CEO make heads or tails of the PALM acquisition that Hurd liked so much as a way to free itself from being held hostage to the Microsoft (MSFT) operating system?(Microsoft owns and publishes MSN Money).
Both of these are difficult, real obstacles to near-term performance. But, again, I don't think they kick in as issues until you get to $46-$47, which I regard as attainable with the "interim" CEO.
I am not going to judge Hurd harshly, despite a desire of many people to do so. I judge nonperformers harshly, and he was anything but a nonperformer. Yep, he screwed up, but I think he has enough of a team to keep the company competitive.
I only wish that were his legacy.
At the time of publication, Cramer was long AAPL and ACN.
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