Ignore Jim Chanos - Don’t Bet Against Meg Whitman: Pros

On Wednesday renowned short seller Jim Chanos made headlines on CNBC when he told us HP was a cheap stock that will get cheaper.

Famed for being among the first to short Enron, Chanos, the head of Kynikos Associates is known for parsing through mountains of research and uncovering items that nobody else has noticed.

And on Wednesday at CNBC’s Delivering Alpha event he said while going through Hewlett Packard's financials he found that, “HP was hiding R&D spending through acquisitions."

He called it an important concept that a lot of people miss.

Chanos went on to say “when you go on to see that the company purchased its R&D – capitalized it if you will, R&D is normally expensed – you see a totally different picture.”

When the news crossed around 12:30pm ET HP shares pared most of their gains but then bounced back by 1p - which you can see in this chart.

Evidently not everyone sees the same picture that Chanos sees.

Fast Money traders Anthony Scaramucci and Mike Murphy don't see it. And neither does Bernstein analyst Tony Sacconaghi.

Pretty much our pros think it's a mistake to bet against CEO Meg Whitman.

“Whitman has promised to restore the balance sheet and she’s said she won’t do any acquisitions for the next 18 months,” says Sacconaghi. “My belief is that the cost cutting plan will yield significant savings. I’m optimistic going forward.”

Scaramucci, managing parting of SkyBridge Capital, is also optimistic. “I think Meg has a great management team in place. I can see the stock gaining earnings momentum.”

“I don’t see any reason to short the stock either,” adds Murphy, founder and managing partner at Rosecliff Capital. He thinks the price action is a sign that the Street doesn’t agrees with Chanos at all. “I would have expected the stock to take a harder hit from the Chanos commentary. I don’t see a huge downside in this stock.”

Posted by CNBC's Lee Brodie

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Trader disclosure: On July 18, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long JPM CALLS; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long V CALLS; Mike Murphy is long FB; Mike Murphy is long EBAY; Mike Murphy is long TOL; Mike Murphy is long LEN; Mike Murphy is long SWK PUTS; Mike Murphy is long EMC; Mike Murphy is long URI; Brian Kelly is funds long QQQ; Brian Kelly is funds long SPY; Brian Kelly is funds long TLY; Brian Kelly is funds long XHB; Brian Kelly is funds long XLU

For Anothony Scaramucci (as of 7/10)
Anthony Scaramucci is long AAPL
Anthony Scaramucci is long C
Anthony Scaramucci is long GS
Anthony Scaramucci is long JPM
Anthony Scaramucci is long SBUX
Anthony Scaramucci is long AMZN

For Toni Sacconaghi
Toni Sacconaghi maintains a long position in STX
Accounts over which Bernstein and/or their affiliates exercise investment discretion own more than 1% of the outstanding common stock of the following companies: EMC

For Michael King
Rodman & Renshaw makes a market in VVUS
Rodman & Renshaw makes a market in AMLN

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