Not so blue at Big Blue

Investors are a crazy lot. They pay huge premiums for stocks that do little but offer hollow promises and huge losses during bull markets. As long as sentiment is positive and the economy is growing, throwing caution to the wind comes easily.

Then, when things go boom and the market tanks, taking sentiment with it, investors put cash under their mattresses.

So here we are in the midst of the worst recession of my generation, and possibly the worst since the Great Depression, and the market is tanking. Almost every company in the country is seeing falling revenues and lower profits. Guidance is being reduced across the board. Not a day goes by without some company announcing job cuts. It's an absolute mess.

What then to do with that company that can fight this amazing downdraft and deliver performance that exceeds expectations?

In an efficient market, the buy side imbalance in the trading pits would be enormous. Investors would be banging down the doors to buy such a stock, and rightly so. To find a winner during an absolutely horrible operating environment is about as close to the holy grail as you can get.

Forget about paying premium valuations for companies filled only with promise. Give me shares of the business that excels during difficult times and I will die a happy man!

After the bell on Tuesday, IBM (NYSE: IBM) announced results that handily beat expectations. Big Blue delivered a profit of $4.4 billion or $3.28 per share. Analyst estimates were at $3.03 before the announcement. More importantly and impressively for investors is the announcement regarding guidance. IBM stated that they now expect 2009 profits of $9.20 per share compared to the average analyst estimate of $8.75.

Investors obviously did not see this coming. Fear had so clouded vision that shares of IBM had lost approximately $50 per share during the last year. On what basis did IBM justify a loss of such value?

Clearly there is none and astute investors who were able to buy IBM at the lows are now quite pleased they did. This company is firing on all cylinders at a time when most engines are failing.

Yes, the stock did rally hard on the news, but it has since given back some of the gains. IBM now trades around $90 per share.

Louis Navellier's PortfolioGrader Pro, which rates Wall Street stocks, rates IBM a B or Buy.

Visit AOL Money & Finance for more earnings coverage.

Jamie Dlugosch is a contributor to InvestorPlace.com.