This post is part of a report entitled "Six-pack of technology favorites." You can read about the other top tech stock picks here.

"For more than a decade, International Business Machines (NYSE: IBM) lived up to its reputation as a slow-growing, stodgy company," says Richard Moroney.

The editor of the blue chip advisory, Dow Theory Forecasts, contends, "But over the last 12 months, the picture changed. Strong operating momentum is now propelling genuine operational growth despite U.S. economic weakness."

"Acquisitions and cost cuts have accounted for most of IBM's growth in recent years. In the 10 years ended 2006, sales increased at an annualized rate of less than 2%, and the company lost both market share and influence.

"However, sales growth has accelerated in each of the last three quarters, and per-share profits have risen at least 23% in each period. Consensus estimates, trending upward over the last month, project per-share-profit growth of 24% in 2008 and 11% in 2009.

"A broad business mix has helped the company keep growing during the economic slowdown. IBM may still be best known for its hardware, but the company's strength over the last year has stemmed from the services and software businesses, which tend to be less economically sensitive than hardware.

"Hardware accounted for about 18% of sales in the six months ended June, while services represented 58% and software generated 20%. Financing operations brought in most of the last 4%.

"While the current economic climate has pinched the consumer, companies are still investing heavily in new technology. IBM's products and services help customers improve efficiency, productivity, and security, which in turn can reduce costs. In the six months ended June, IBM's revenue rose 12%, while per share-profits jumped 34%. Revenue from services increased 17% in the six-month period.

With concerns over recession, turmoil in the financial sector, fear of rising rates, high market volatility and a rising aversion to risk, many investors have been avoiding technology stocks.

Investors have feared that these economic headwinds will dampen both consumer spending for technology products and reduced capital expenditures for technology in the corporate sector.

Despite these concerns, some of the newsletter industry's leading advisors are looking beyond the current malaise and seeing longer-term value in some of the tech sector's leading players. They believe that much of the "bad news" is already reflected in the price of the shares, with little recognition being given to their longer-term potential.

For those willing to go against the crowd and buy, as they say, "while blood is running in the street," we offer a six-pack of technology stocks that the some top advisors considers to be among their favorite ideas.

"Partial insulation from the economic slowdown, coupled with new military-aircraft programs, give Lockheed Martin (NYSE: LMT) attractive capital-gains potential over the next several years," says Richard Moroney.

In his blue chip oriented Dow Theory Forecasts, the advisor explains, "A diversified business mix provides investors a measure of safety in a difficult economic climate. The stock is a Focus List Buy."

"Lockheed seems well-positioned with regards to the U.S. defense budget, with very little exposure to Iraq. The company is capable of growing profi ts even if the new U.S. president pulls troops out of the country.

"While defense-spending growth is likely to slow in coming years, ongoing security threats and the need to replace aging equipment should keep the baseline defense budget, which excludes war-related costs, growing through at least 2012.

"A diversified business mix provides investors a measure of safety in a difficult economic climate. After the Air Force, Lockheed's next-largest end market is civil government and homeland security, accounting for 26% of revenue.

"The U.S. Navy accounts for 20% of sales and the Army 10%. About 13% of sales are international, and the U.S. communications industry accounts for 3%.

"For investors who seek superior relative performance but are unwilling to sacrifice dependability, the we offer four funds that consistently outperform their peers," says Richard Moroney.

In the mid-year forecast for his Dow Theory Forecasts, he explains, "All of these funds have outpaced category averages in each of last five years, and sometimes much longer." Here, he looks at those funds that he considers "perennial winners."

"To be sure, past returns do not guarantee future success. But, while the evidence is not conclusive, academic studies generally indicate performance tends to persist, particularly at the extremes. That is, the best funds continue to outperform their peers, while the worst funds keep lagging.

"Fidelity Export & Multinational (FEXPX), our favorite pick among large-company growth funds, is riding an impressive nine-year winning streak - the longest in its category. Among the more than 1,800 large-cap growth funds, less than 80, or roughly 4%, have outperformed the peer-group average for five straight years.

In its mid-year forecast, Dow Theory Forecasts -- which has been published for 5 decades -- features its top current picks, including IBM (NYSE: IBM), which earns its top designation as a "Focus List Buy."

Editor Richard Moroney explains, "IBM has repeatedly forecast its goal of per-share earnings of $10 to $11 in 2010. The company is well on its way to achieving that goal. Software, in particular, is key to IBM's earnings target.

"The company completed its acquisition of Telelogic in April, three months after purchasing Cognos. IBM expects acquisitions to contribute 3% of its goal of 7% to 10% growth in software sales.

"From 2002 to 2007, mainframe sales averaged 6% growth, but sales fell in three of those years, including 2007. The March quarter showed no improvement, as sales in the division fell 7%. But, with energy prices up, IBM sees an opportunity with its new, energy-efficient Z-series mainframe.

"Server sales have been spotty, but IBM's sales force translates server revenue into two to three times as much in software and systems revenue. IBM, with the potential to reach $155 to $165 over the next 12 months, is a Focus List Buy and a Long-Term Buy."

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

"Uncertainty about the legal disputes has weighed on Qualcomm (NASDAQ: QCOM)," says Richard Moroney, who rates the stock a long-term buy. The editor of Dow Theory Forecasts explains, "Though the court case may distract investors, Qualcomm's long-term fundamentals appear solid." Here's his bullish outlook.

"The company is embroiled in disputes over royalty fees paid for use of its patents, particularly by one of its largest customers, Nokia. In March, the combatants agreed to consolidate a host of lawsuits into one case to be heard later this year and likely to be decided by year's end.

"Barring a disastrous court loss, which seems unlikely, Qualcomm shares should benefit. Any resolution will reduce uncertainty. By the end of this year, Qualcomm should be able to jettison some of the baggage holding back its stock.

"While the U.S. economic slowdown has sparked fears of a decline in demand for microchips, Qualcomm should benefit as cell-phone users worldwide transition to third-generation technology, which allows for faster downloading of video, music and other data.

"Shares of Walgreen (NYSE: WAG) have come under pressure in recent months, reflecting a slowdown in sales because of a weakening economy and intensifying competition," notes Richard Moroney.

The editor of Dow Theory Forecasts adds, "However, Walgreen's long-term prospects remain appealing, and the stock is attractively valued. Walgreen is a Long-Term Buy." Here is his review.

"Big, strong, and healthy, Walgreen is the largest U.S. drugstore chain as measured by revenue and the second-largest based on store count.

"The company operates more than 6,200 stores in 48 states and Puerto Rico and plans to boost the count to 7,000 by fiscal 2010 ending August. Walgreen sees long-term potential for about 13,000 U.S. stores. Prescriptions generate about 65% of total sales, with the rest coming from general merchandise.

"In fiscal 2007, both pharmacy and general merchandise sales growth outpaced the industry average, and Walgreen increased market share in nearly all of its core categories.

"Give muni bonds a good look." says Richard Moroney in Dow Theory Forecast, a leading "blue chip" newsletter that has been publishing for over five decades, who offers a trio of Vanguard funds for investors seeking safety and income.

The advisor explains, "Municipal bonds are showing signs of life, presenting investors with an intriguing opportunity." Here, he review the situation and offers some favorite investment vehicles.

"Muni bonds usually yield less than Treasurys because interest payments from municipals are exempt from federal income taxes.

"But in today's topsy turvy market, intermediate-term municipal bonds now yield around 3.7%, versus 3.6% for 10-year Treasurys. A tax-free yield of 3.7% is the equivalent of a taxable yield of 5.5%, assuming a 33% federal tax bracket.

"Uncertainties about the economy and credit concerns have weighed on bonds, lowering prices and raising yields. Hedge funds have also dumped muni bonds in an attempt to cover trading strategies gone sour.

Following a disappointing auction, Sotheby's (NYSE: BID) lost over a third of its value in trading last week. Despite the downfall, Richard Moroney sees an opportunity to "bid" on the shares of the art auction firm.

The editor of Dow Theory Forecasts explains, "Sotheby's plunged in price after disappointing results for a major art auction triggered several brokerage downgrades. Following the drop, the company posted better-than-expected sales for the September quarter.

"However, because of losses on guarantees that Sotheby's provided to sellers in the disappointing auction, earnings were slightly worse than consensus estimates. For the quarter, the company lost $0.33 per share, an improvement from the per-share loss of $0.49 in the year-earlier period.

"Because of the seasonal nature of the art business, Sotheby's typically loses money in the September quarter. The company says it remains optimistic on the outlook for the art market for the remainder of 2007, and it seems Wall Street has overreacted to a single disappointing auction.

"While worries regarding the guarantees that Sotheby's provides and the general health of the art market could keep the stock under pressure in the near term, we view the sell-off as a buying opportunity.

"Trading at 12 times expected 2007 earnings, the stock seems undervalued considering the company's track record and outlook. Sotheby's remains a Best Buy."

Each day, Steven Halpern's TheStockAdvisors.com website features the latest investment commentary and favorite stock picks of the nation's leading financial newsletter advisors.

"In volatile times, keep it simple," instructs Richard Moroney. "For us, simple is stocks with strong fundamentals and solid growth prospects that trade at attractive valuations."

In his Dow Theory Forecasts, the advisor profiles IBM (NYSE: IBM) and PepsiCo (NYSE: PEP), each of which is involved in large share buybacks.

Moroney explains, "IBM competes in mature industries but continues to drive double-digit profit growth, developing software products and targeting fast-growing niches in the services business." In addition, he adds, IBM is expanding in such emerging markets as Brazil, China, India, and Russia.

Moroney states, "Reflecting the strength of its software and services businesses, IBM recorded 16% growth in per-share earnings for the first nine months of 2007. Services contract signings, a key indicator of IBM's future growth, jumped to $11.8 billion in the September quarter, up 12% from year-ago levels.

"Cost-cutting efforts have boosted profitability in recent quarters, a trend likely to continue. Share repurchases are also boosting results. IBM completed a $12.5 billion accelerated share-repurchase agreement in May, reducing the share count by 8%.

Chevron (NYSE: CVX) is a buy based on the proprietary screening model used by Dow Theory Forecasts; the stock scores a 96 (out of 100), based on top ratings for quality and performance.

Editor Richard Moroney notes, "measured by proved reserves, Chevron is the fourth-largest oil company in the world. Refining and marketing assets include 20 refineries and about 20,500 retail sites in nearly 90 countries."

He explains, "High oil and gas prices and strong refining margins continue to drive Chevron's results. The company is working to improve its portfolio of production assets through acquisitions and international exploration, which should boost reserve replacement and production capacity."

With production slowing at its mature North American and North Sea assets, he points out that Chevron has been working to expand its portfolio in promising growth areas. (For example, in 2005, he observes, Chevron purchased Unocal for nearly $17.3 billion.)

"Many U.S. companies are getting a lift from strong overseas business, and McDonald's (NYSE: MCD) is no exception," says Richard Moroney, noting that overeas same-store sales are growing at roughly twice the rate seen at U.S. outlets.

"That's not to say that the firm's domestic business is stale," he adds in Dow Theory Forecasts. Indeed, he notes that the company has reported 51 consecutive months of same-store-sales growth and has been beefing up its U.S. stores with new menu items and longer operating hours.

Moroney explains, "McDonald's should continue to benefit from the ongoing rollout of new menu items, including premium salads, snack wraps, and breakfast items." The company, he notes, has been extending operating hours at some restaurants and said it wants all of its U.S. restaurants to open by 5 a.m. by 2009 to capture more of the growing fast food breakfast market.

Another key to McDonald's success, he contends, has been its willingness to shed operations and outlets that are underperforming or diverting resources from core operations. To that end, the firm sold its remaining interest in Chipotle Mexican Grill (NYSE: CMG)and agreed to sell its Boston Market chain.

"New leadership often emerging during corrections," says Richard Moroney in Dow Theory Forecasts, who highlights 6 relative strength blue chips.

The advisor explains, "Stocks have retreated sharply and broadly, reflecting concerns that turmoil in the corporate-junk-bond and mortgage-debt markets will spill over to the broader economy – and perhaps halt the boom in takeovers."

Near-term volatility seems likely, he suggests, and a pullback to 12,700 to 13,350 on the Dow Industrials would be consistent with a secondary correction in an ongoing bull market. While holding some cash on the sidelines seems prudent, he advises, his recommended cash position remains at 5% to 10%.

Looking to find the stocks that will qualify as "new leadership" for after this correction, he notes, "A stock's ability to outperform during such pullbacks is a bullish indicator."

"Public companies share the wealth with investors mainly through dividends and stock buybacks, and both actions have historically benefited investor returns," explains Richard Moroney in Dow Theory Forecasts, a blue-chip-focused service that has been published for over 50 years.

To benefit from both types of yields, the advisor has combined both dividends and buybacks to create what he calls a "shareholder yield." He explains, "Since both types of yield signify added value to shareholders, investors should be able to improve their odds in the market by harnessing the power of both statistics."

Moroney suggests, "In this case, dividend yield equals cash dividends over the prior 12 months as a percentage of a company's current market value, while the buyback yield equals cash spent on buybacks as a percentage of market value." The shareholder's yield is then the dividend yield and the buyback yield added together.

Moroney then screened for blue chip stocks with high shareholder yields, highlighting four that stood out in his search: Citigroup (NYSE: C), Exxon-Mobil (NYSE: XOM), McDonald's (NYSE: MCD) and Microsoft (NASDAQ: MSFT).

When looking for growth, Richard Moroney, editor of Dow Theory Forecast, notes that he avoids speculative and expensive "hypergrowth" stories and prefers to focus on steady growers with reasonable valuations and the ability to exceed expectations."

Among his current favorite growth ideas is Nike Inc. (NYSE:NKE). He explains, "The company hopes to increase its annual sales to $23 billion by fiscal 2011 ending May, up from $15 billion in fiscal 2006, as part of a five-year growth strategy announced in February."

He notes that the firm's plans include expanding its retail presence with the addition of 100 new company stores worldwide over the next three years, half in the U.S.

In addition, the company is expected to divide the Nike brand into six categories -- soccer, basketball, running, men's training, women's fitness, and sports culture -- to better target consumers. Moroney says, "Management expects to reach its sales growth target without the help of new acquisitions."