STOCK PICKS: Top 5 Large-Caps Aug. 13

Management was pleased with the second quarter results in the face of a challenging business climate. Bear in mind, however, that any adverse movements in global capital markets may impact Northern Trust's future financial performance.

IBM (IBM Quote) uses advanced information technology to provide customer solutions worldwide. Our buy rating for IBM has been in place since August 2005. This is based on factors such as the company's revenue growth, impressive record of earnings per share growth and compelling growth in net income.

For the second quarter of fiscal 2008, IBM's revenue rose by 12.8% year-over-year. This appears to have helped boost EPS, which improved 27.7%, rising from $1.55 a share in the second quarter of fiscal 2007 to $1.98 a share in the most recent quarter. The company's EPS has trended upward over the past two years.

IBM's net income increased 23.3% when compared to the same quarter one year prior. Additionally, the company's net operating cash flow increased 24.94% to $4.3 billion when compared to the same quarter last year.

Management was pleased with IBM's results for the second quarter and first half of fiscal 2008. With 18% of the company's geographic revenue coming from growth markets, management believes IBM has the ability to thrive in both emerging and established markets. Management also stated that IBM has a competitive edge in the global economy due to its business model.

The company remains optimistic about its outlook for the full fiscal year and for its plans to earn between $10 and $11 a share in 2010. Bear in mind, however, that the company's future performance is subject to a variety of factors, including its ability to continue developing and marketing new and innovative products and services, the overall economic environment, and the business condition of IBM's distributors or resellers.