"That pragmatic culture has in many ways persisted, leaving H-P better positioned than most when the recession hit. H-P finds safety in diversification.

"While controlling the biggest slice of the global personal-computer (PC) market, H-P also ranks second in computer servers designed for large businesses and is gaining share.

"None of H-P's six business segments accounts for more than a third of sales. H-P Services (29% of 12-month sales) provides a variety of technology and outsourcing services.

"The $13.9 billion acquisition of Electronic Data Systems in August 2008 nearly doubled the segment's sales. The EDS business features annuity-like revenue streams, and the acquisition reduced H-P's reliance on more-cyclical units.

"Rising demand for affordable netbook computers accounts for much of the growth in personal systems (31% of sales). However, this market is plagued by falling prices, in part because of stiff competition.

"In the July quarter, H-P sold 19% more notebook computers than it did in the year-earlier period, yet revenue from notebooks fell 10%. Growth in China and stabilization in the U.S. helped limit revenue declines in the quarter.

"More than 60% of revenue comes from outside the U.S., yet no foreign country accounts for more than 10% of sales. H-P holds the top spot in India with a 17.8% share of the PC market, including a 30.9% share for notebooks. Performance in China and other emerging markets was strong in the July quarter, offsetting weakness in Europe.

'H-P's cautious approach carries over to its balance sheet, which boasts cash of $13.59 billion, or $5.58 per share. Long-term debt doubled over the past year, mostly to fund the EDS acquisition, yet still represents just 25% of total capital.

"H-P has enough cash to pay off nearly 98% of its long-term debt. The company also generates excellent cash ?ow, sharing some of that cash with investors via stock buybacks that have lowered the share count by 14% over the past three years.

"Wall Street sees per-share profits rising 5% to $3.81 in fiscal 2009 ending October, followed by an 11% jump to $4.22 in fiscal 2010. Both estimates have climbed over the past month. With a reasonable valuation, solid growth potential, and rising earnings estimates, Hewlett-Packard is a Long-Term Buy."

Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.