If you took advantage of Automatic Data Processing's (ADP) meandering this summer near $39, you made the correct move, as the shares have moved smartly higher, taking out resistance at $40.

Moreover, ADP, which I first wrote about on May 8, 2009, at a price of $36.84, is still favored at this juncture. Here's why:

ADP's FY2011 revenue will likely increase 2% to 3%, collared by lower-than-expected U.S. monthly job growth and business formation. Look for FY2012 revenue to rise 4% to 6%.

Here is a common sentiment about the stock market: "No fun at all. As I have said before, I believe it has turned into one big casino largely divorced from its original goal of providing capital to companies who produce something of value."

There's a lot of truth to what "granny" recently said to me in an e-mail. Fortunately she also noted "FYI Granny's up 5.86% + dividends." That would give her a gain of about 10% in the past ten months since I posted Where should granny put $50,000, suggesting a very conservative portfolio for an uncertain time.

Not only has she earned a very nice return, surpassing her CD account by 9.5% (20 fold), but she was able to do so with a great deal less volatility than the overall market most of us have lived through.

"Our primary purpose is to assist investors in growing their capital and income base from which to derive cash for their current and future needs," says blue chip stock specialist Kelley Wright.

The editor of Investment Quality Trends explains, "To that end we believe that high-quality stocks purchased at historically low-price-to-high-yield offers the best potential for downside protection and upside appreciation.

"The Timely Ten list of stocks is our reasoned expectation based on our methodology and experience for what we believe will perform best over the next five years.

"Fear is back and it can be seen in the internals. So what is one to do? What we always do: identify quality, establish value, and take advantage of opportunity when it presents itself," suggests Kelley Wright.

The editor of Investment Quality Trends -- an advisory service that assesses blue chip stocks by analyzing their historic dividend yield levels -- adds, "While all ships go out with the tide, value is eventually rewarded. Remember, we are in this for the long haul.

"Our current Timely Ten -- featured below -- is our reasoned expectation based on our methodology and experience for what we believe will perform best over the next five years. Do we believe that all 10 will go up simultaneously or immediately? Of course not.

Automatic Data Processing (ADP), which I first wrote about on May 8, 2009, at a price of $36.84, has pulled back recently, in-sync with the market's decline, and it's created a decent entry point for those who did not consider the shares earlier.

ADP survived the nation's worst recession since the Great Depression in adequate shape, and the argument forwarded here points to 1% to 3% revenue growth in 2010, followed by a stronger gain in 2011. New accounts should increase as business formation improves in the second half of 2010.

Over the past week, oil prices have been flirting with the psychological $80 barrier, and they were finally able to settle above $80 Wednesday. Oil traded up $1.26 a barrel to $80.94.

Earlier today, we got the weekly inventory report from the Department of Energy, which showed a greater-than-expected jump in reserves last week. The report showed that oil inventories grew by four million barrels, which was well above the one-million-barrel increase that analysts had forecast.

"Our primary purpose is to assist investors in growing their capital and income base from which to derive cash for their current and future needs," says Kelley Wright.

The editor of IQ Trends -- and author of the just-released book Dividends Still Don't Lie -- explains, "To that end we believe that high-quality stocks purchased at historically low-price-to-high-yield offers the best potential for downside protection and upside appreciation.

The contenders list is down to twelve stocks and three puts. I will not be trimming the list today. Instead, I will be reviewing possibilities among four more stocks of well established companies.

There are the two largest home improvement stores, Home Depot (HD) and Lowe's Cos (LOW) as well as the two largest payroll companies, Automatic Data Processing (ADP) and Paychex Inc. (PAYX). They are all fine, well-managed companies, so this will just be a numbers game along with a sense of whether the economy is going to reward investors in 2010, or if it's too early.

One of my wonderful friends, Ms. P, asked me for some guidance on how she might allocate $50,000 currently earning peanuts in a money market account. Though she is decades from becoming a grandmother, after a brief discussion about her financial parameters, it became clear to me that she was looking for a "granny fund."

In reality, my recommendations would be suitable, and perhaps desirable, for many passive investors as well.

The $50,000 is a portion of money Ms. P has set aside to purchase a home, which might happen in six months, but could also be pushed out further, depending on the economy and her situation. Basically, she wants to cover all her bases because she might need the money at any time and does not want to be caught short, while at the same time she would like to generate some revenue without taking any big risks.

I'm Reiterating my Buy rating for Automatic Data Processing (NYSE: ADP), first recommended on May 8, 2009 at a price of $36.84.

To be sure, at least short-term, headwinds will confront ADP, as monthly job gains are not likely to approximate levels experienced during the initial stage of previous U.S. economic recoveries.

The market may be entering a more volatile period or it may just go sideways for a while. The last few weeks the market has been down. Maybe it is because the rapid rise mid-March through mid-June is forcing people to stop and take a breath, or perhaps it is because investors are having second thoughts about whether the "green shoots" Ben Bernanke spoke of in regards to a healing economy were really just weeds.

All in all, I still believe that there is opportunity in this market and I have been trying to point out how investors can get in with as little risk as possible, while being rewarded for their patience now, and when a recovery ensues ---- whenever that is. To this end, two weeks ago I posted Serious Money: Five high-yield, safe, diversified stocks and decided to follow up with another five I think will produce similar results.

Automatic Data Processing (NYSE: ADP) is a play that's for the daring only. ADP, the largest provider of payroll outsourcing services in the world, is likely to register flat to slightly declining revenue in FY 2009.

Further, price pressure stemming from new alternate payroll/tax filing options, and incremental additions to payrolls -- mass hirings will be the exception, not the rule -- will likely lead to less-robust growth than during the previous two economic expansions.

"Any further market weakness creates creates another opportunity to acquire some outstanding stocks," suggests Kelley Wright, noted for his focus on blue chip, dividend-paying stocks.

In his Investment Quality Trends newsletter, he looks at the benefits of keeping a long-term focus, the value of dividend districutions to an investor's long-term returns, and his current "timely ten" picks for conservative investor.

"The cash dividend for the Dow is $322.40. One year ago the dividend was $284.06. Amidst all the turmoil in the markets and the economy something must be going right with the Dow 30 companies because the dividend is ever climbing.

"Dividends, as we all know, can only come from the reality of earnings; you can't pay what you don't have. The dividend yield on the Dow is currently 2.66%, which represents an 11% downside to a 3.0% yield and the historically repetitive area of Undervalue.

"Will the Average make it down to that level? No one knows but that isn't the point. At current levels the upside is FAR greater, particularly in many of the stocks in our Undervalued area.

"As far as safety goes, Automatic Data Processing (NYSE: ADP) is hard to beat," says Gregory Dorsey in Leeb's Income Performance Report. Here's the advisor's review.

"In our search for stocks that can not only grow in good times, but will also hold up well when the going gets rough, we find ADP. Its steady cash generation means the company has a number of options at its disposal when it comes to maximizing shareholder value.

"ADP offers services including payroll processing, human resource benefits administration products and other outsourcing services. The stock's P/E, using expected year-ahead earnings, doesn't seem so cheap at 18. But relative to the company's long-term growth rate, it's quite reasonable. In fact, the stock is trading at its lowest valuations in more than a decade.

"And ADP's balance sheet has never been stronger. Management's confidence in the company's future recently prompted them to up the stock's payout by 26%. We see good things ahead for ADP as well.

"ADP has demonstrated a record of maximizing shareholder value. For instance, the company has a history of using part of its cash flow generation to repurchase its own stock. In the first quarter the company repurchased approximately 5.8 million shares, and it's likely to continue to buy back shares in the future."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

MOST NOTEWORTHY: The small-cap bank sector, Waste Connections, Warnaco Group and Intersections were today's noteworthy upgrades:

• Lehman upgraded the small-cap bank sector to Neutral from Negative as they expect the group to benefit from the decline in short-term interest rates and the steeping yield curve. The firm upgraded Associated Banc-Corp (NASDAQ: ASBC), Pacific Capital Bancorp (NASDAQ: PCBC) and Westpac Banking Corp (NYSE: WBK) to Equal Weight from Underweight.
  
• Friedman Billings added Waste Connections (NYSE: WCN) to its Top Picks list. The firm believes the company can outperform the group and overall market in an economic downturn.
  
• Warnaco Group (NASDAQ: WRNC) was upgraded to Overweight from Neutral at JP Morgan on valuation and growth potential.
  
• JMP Securities' checks indicate that Intersections (NASDAQ: INTX) is on track to meet EPS expectations for the quarter and is well positioned to beat their 2008 EPS estimate of 80c. The firm raised shares to Strong Buy from Outperform.

OTHER UPGRADES:

• Best Buy Incorporated (NYSE: BBY) and AutoZone (NYSE: AZO) were upgraded to Strong Buy from Outperform at Raymond James.
  
• The firm also upgraded shares of CBRL Group (NASDAQ: CBRL) to Market Perform from Outperform.
  
• JP Morgan upgraded Ruby Tuesday (NYSE: RT) and Plexus Corp (NASDAQ: PLXS) to Overweight from Neutral.
  
• Bear Stearns raised MFA Mortgage Investments (NYSE: MFA) to Outperform from Peer Perform.
  
• Goldman added Automatic Data Processing (NYSE: ADP) to its Conviction Buy List.