Cramer Names HP (HPQ) His Top Tech Stock for '09

On last night's Mad Money, Jim Cramer proclaimed Hewlett-Packard (NYSE: HPQ) would be the best tech stock of 2009. Further, Cramer said HP would be one of the best five stocks in the DJIA this year.

Cramer believes Hewlett-Packard's CEO, Mark Hurd, is doing a great job at the helm with his focus on cutting costs and "executing smart business strategy" in an effort to turn the company around. Cramer feels that Hewlett-Packard's recent acquisition of EDS "could be a real game-changer" as it allows HP to tap into a solid growth play in the outsourcing and IT spaces.

Jim also points to HP's dominance in its top markets: PC's and printers. With Dell's (Nasdaq: DELL) presence in the PC market waning, as well as Lexmark's (NYSE: LXK) in the printer market, Hewlett-Packard has little competition. Cramer believes that HP could even steal market share from such top dogs as IBM (NYSE: IBM) and EMC (NYSE: EMC).

With shares of Hewlett-Packard trading at about 8.8x FY10 expected EPS of $4.22, Cramer notes that this multiple is much lower than the company's historic 5-year valuation of about 17. As Hewlett-Packard has a long-term growth rate of 13.5%, Cramer feels that a multiple of about 11x is not too-far fetched, and sees the stock trading around $46 in no time.

Shares of Hewlett-Packard are trading up nearly 3% to $37.37 today. Based on Cramer's valuation and price target, shares of HP could see upside of about 23% from current levels.

Hewlett-Packard Company provides a range of products, technologies, software, solutions, and services worldwide.

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