Surprising Industry Performance: Personal Computers

What once had been the driving force of technology has for several years failed to compute with investors. Personal computers, those boxes that get us to the Internet -- and The Motley Fool! -- have been commoditized as investments for many of us.

Surprise, surprise ...
Considering the general consensus opinion that there's not much clicking in PCs as an investment, it's interesting to see the blazing speed of performance over on Motley Fool CAPS. Over the past year, personal-computer makers have lit up the monitors with a better than 50% return. That doesn't put them at the top, but for an industry that doesn't have much standing with investors, that's pretty surprising.

The Apple of investors' eyes
Apple has outdistanced all of the other computer makers with its incredible results over the past year. Much of that performance came as a result of products other than its revolutionary (to me, anyway) iMac -- the promise of the iPhone being just one example -- but Apple computers are still a large component of the company's revenues and can't be ignored.

CAPS investors apparently aren't storing Apple away with the electrical cords and dust bunnies, either, though they also don't bestow the company with the highest possible ratings. For example, jyoung12387 sees lots more room for Apple to run despite its run-up:

Even though there has been a big [run-up] in [Apple's] price, it will continue to go higher. Apple's computer sales are growing faster than the industry average, and the rest of its products are all [growing] at a considerable pace. [Apple's] PEG ratio is only 1.69, which shows it isn't that overpriced. [Management] has done well with a [return on equity] of 23%, and will continue to do so with Steve Jobs at the helm. When Apple was trading at 90 [I] said [I wouldn't] be [surprised] to see it double within the next 12 months. Only [40] more dollars to go.

CAPS player muney24 concurs that PC sales are still the engine behind the flash and style of Apple's latest gee-whiz products:

Apple is a smart and innovative company with a CEO who continues to find better ways for users to interact with state-of-the-art technology. The iPhone will pick up steam both domestically and abroad as more and more people become familiar with it and more confident that it can function properly. AAPL will also surprise the analysts with their PC sales figures. I am in college and am amazed at how many college students are buying Apple computers. This is not by chance. The PC's last longer because there are fewer viruses to target them, they're easier to use, and could not be marketed any better. Apple is a strong company that will only grow stronger in the upcoming years.

Hewlett-Packard is another computer maker that had seemed to teeter on the edge of oblivion and almost got toppled by executive distractions, let alone ill-conceived acquisitions. Now the company looks far more focused, and it's that focus that probably accounts for the CAPS investors giving it the same rating as Apple. They're the only two companies in this industry to achieve three stars.

CAPS player gardnersf recently noted the company's renewed vigor

HP is making significant investments in their enterprise software market. This is an area of large potential that will add to the [company's] bottom line. In addition, the investment in management software can drive results in the outsourcing management business [as well] as the enterprise server market. I expect consumer sales to remain flat with the largest growth coming from medium to large enterprises, and capital improvements can no longer be delayed.

All-Star investor airenInDebt, with a better-than 97% player rating, thinks management is putting its money where its mouth is.

This is a solid company that is making excellent strides in several different areas. They are buying back [$8 billion] of their stock. Think they are confident in their growth potential?

One Fool's view
The demise of the PC industry has been bandied about for a while, yet even though it has perhaps been beaten down, it has not been displaced. There are still good investments within the industry, and as my recent conversion to a Mac highlighted, I've been putting my money into its products -- although not yet into its stock.

What's your view?
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Fool contributor Rich Duprey recently bought his second Mac but owns no shares in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.