????Hewlett-Packard looks like Apple's polar opposite. HP's stock is down 35% this year, despite a recent bump, thanks to horrendous management; Apple's shares shot up 25% amid a CEO change. HP failed to create a hit tablet; Apple's iPad is still selling like crazy. And institutional investors who control billions seem to have given up on HP while those same investors believe enough in Apple's future to make it the world's most valuable company -- worth more than even Exxon Mobil (XOM).
????So is it heretical to suggest that you ignore Apple (AAPL) for the moment and give HP (HPQ) shares another shot? That's what some value investors are saying. And last month they got more ammunition. Bernstein analyst Toni Sacconaghi, who usually grabs headlines for his Apple forecasts, did some number crunching after HP's shares fell from $49 to $22 and found that HP is cheap -- like historically cheap. It's trading at 5.5 times expected earnings for the next 12 months. No large technology stock -- other than that of reeling Blackberry-maker RIM (RIMM) -- has traded at that level or below since 1990.
????Fortune first reported this story in its Nov. 7th issue. Since then, HP's stock has jumped 22% to $28. But these value investors still see a stock than can at least grow into the $40s.
????Investors' frustration with HP is pretty easy to dissect. Since former CEO Leo Apotheker took over last November, the company lowered sales forecasts three times. It killed devices for its mobile operating system half a year after excitedly talking up their possibilities. Then in August, Apotheker announced HP's $10 billion acquisition of software-maker Autonomy that seemed a little too rich to some investors. He followed it up with news that HP was exploring a spinoff of its $41-billion PC business. Which was finally reversed last week, to Wall Street cheers.
????Whether his replacement Meg Whitman is the right fit is anybody's guess. Analysts have wondered whether Whitman, who as CEO of eBay (EBAY) managed the site's 15,000 employees and its consumer-focused business, can lead HP's 320,000 employees and the enterprise-focused company.
????The value investors buying HP stock say it may not matter. Veteran Wally Weitz thinks at its current share price, the market is saying HP is broken. He sees a solid, albeit banged-up, tech giant with solid recurring cash flows in printers and services. "We've tried to get comfort that the individual businesses are good or at least pretty good," says Weitz. He bought shares in late September, betting on a market overreaction.
