Hewlett-Packard's (HPQ) Invulnerability

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HP (HPQ) is a curious stock by many measures. Over the last year, it has whipped shares in competitors including IBM (IBM) and Dell (DELL). But, what may be more telling is its performance in the market downturn. During last week, HP was up 5% at one point and ended the week up over 3%.

HP must have some strong attraction both is good markets and bad.

It may be that the company’s diversification pulls in Wall St. dollars. It now has significant share in the software, PC, server, and printer businesses. The company is the market share leader globally in both PCs and servers. Its lucrative software business is growing and the company is using its high stock price to buy up smaller tactical additions to add to its arsenal.

HP has also proven itself to be a master cost-cutter. As revenues have increased, so have margins. The market views management as brutal on keeping costs low, letting employees go even as its operations do better.

No one should be surprised if HP continues to run. The market does not seem to drag it down even when the going gets tough.

Douglas A. McIntyre