For This Firm, Apple Is No Role Model

Don’t expect Hewlett-Packard to be the next Apple , Amazon , Google or Research in Motion , Cramer said Monday. In fact, the stodgy computer firm doesn’t need to be. Not to make money for itself or investors.

Those comments came in response to a Sunday New York Times article that claimed Hewlett-Packard might need “a dose of anarchy” to liven up the company. Apparently HP, “the dull grunt of the tech world,” lacks “creative inspiration.” CEO Mark Hurd should be on the hunt for the next iPhone rather than cutting costs and diversifying his business.

Cramer warned viewers to be wary of these articles. The media is always concerned with the latest trend, what’s cool right now, and that’s often irrelevant to sound investing. It is easy to get lost in the flash of some new gadget – even though it has no effect on the success or failure of a company like HP. So the lesson here: Don’t do it.

Cramer likes Hewlett-Packard for all the reasons the Times seemed not to. He endorsed Hurd’s focus on operations and his ability to deliver great numbers without an iPhone, iPod or BlackBerry. The CEO also has done a great job of growing HP from a simple PC company into a global, diversified technology firm. Even still, first-quarter computer shipments rose 3% year-over-year, while the industry overall dropped 7%.

Hewlett-Packard just reiterated its guidance three weeks ahead of the quarter, the printer business is generating massive cash flows, the move into services and outsourcing was a smart one, the EDS acquisition should cut another $2.5 billion in costs and take share from IBM – can you can see why Cramer’s charitable trust owns this stock?

The 9.7 price-to-earnings multiple is about seven points lower than the five-year average, making HP very cheap. It’s just further proof that sometimes even the revered New York Times can be wrong about what makes a stock move. Cramer’s suggestion: Focus less on the flash and more on hard figures. It seemed to work for Hewlett-Packard.

Cramer's charitable trust owns Hewlett-Packard.

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