About: Hewlett-Packard Co.

Ticker: HPQ

Exchange: NYSE

What does the company do? Makes and sells computer hardware and software

2009 Financial report:

Net sales: $114.6 billion

Net income: $7.66 billion

Q. I'm concerned about all the leadership drama at Hewlett-Packard Co. affecting my stock. What is your opinion of it?

A. More important than the drama is this computer giant's expansion into database and business application software to go along with its proven hardware business. It has a new CEO steeped in that software background.

In fine financial condition with plenty of cash and manageable debt, Hewlett-Packard also has considerable management depth. Facing fierce competition with a need to adapt to changing times, it intends to concentrate on the four key areas of enterprise software, printers, personal computers and services.

Hewlett-Packard ranks No. 1 in PC sales ahead of Dell Inc., Apple Inc. and Acer Inc., though devices such as Apple Inc.'s iPad provide strong competition.

The firm recently released its own Slate 500 touch-screen tablet computer that runs Windows and sells for about $800. It introduced webOS 2.0, an update to its Palm mobile operating software. The smart phone company Palm was purchased by Hewlett-Packard earlier this year for $1.2 billion.

Hewlett-Packard (HPQ) shares are down 15 percent this year following last year's 42 percent gain. The company's third-quarter net was up six percent over the year-earlier quarter.

But as you have pointed out, headlines surrounding its top executive position have overshadowed its business moves:

• CEO Mark Hurd resigned under board pressure over fraudulent expense reports and his relationship with a female contractor who had filed a sexual harassment complaint.

• Leo Apotheker, the former CEO of German software company SAP AG named to replace Hurd, has drawn scathing criticism from Larry Ellison of rival Oracle Corp. SAP must pay damages to Oracle for past illegal downloads of Oracle documents.

• Hurd is now Oracle's co-president.

Consensus analyst recommendation on shares of Hewlett-Packard at their reduced price is "buy", according to Thomson Reuters, consisting of 15 "strong buys", 12 "buys", eight "holds" and two "underperforms".

Hewlett-Packard recently agreed to buy the 3Par Inc. data storage firm. On Hurd's watch, it completed its 2008 acquisition of Electronic Data Systems Corp., its largest purchase since the Compaq Computer deal in 2002. The latter controversial acquisition engineered by former CEO Carly Fiorina ultimately led to her ouster.

Earnings are expected to be up 17 percent for the 2010 fiscal year and 13 percent the following fiscal year, according to Thomson Reuters. The five-year annualised growth rate forecast is 10 percent versus 14 percent expected for the computer systems industry.

Q. Schneider Value Fund has done terribly. Is there hope for improvement at all?— P.J., via the internet

A. There is potential for both improvement and regression at this volatile fund that requires a hefty $20,000 minimum investment. It is not for investors with weak stomachs.

The $95 million Schneider Value Fund (SCMLX) is up 14 percent over the past 12 months and averaged an 11 percent annualised decline over the past three years. Both results rank in the lowest 10 percent of mid-cap value funds.

"This bold fund is either feast or famine because it is has a deep-value orientation toward companies with heavy debt and depressed earnings," said Katie Rushkewicz, mutual fund analyst for Morningstar Inc. in Chicago. "That sets it up for extreme performance, such as its 55 percent plummet in 2008 and 39 percent gain in 2009."

Arnie Schneider III, who launched Schneider Value Fund in 2002, makes his portfolio decisions with the help of six analysts. The team also runs Schneider Small Cap Value Fund (SCMVX). It is, however, primarily Schneider's show and that means its future prospects are closely tied to him remaining in charge.

Fundamental research is used to select struggling companies going through management, strategy or cost shifts. Economic trends play a large role in its performance, and it often has large holdings in its favored industries. It trades more than most value funds and therefore is not tax efficient. Its investment themes can sometimes take months or years to evolve, which requires patience.

"Over the long haul this fund has done pretty well, gaining more than nine percent since it was started," said Rushkewicz. "A supporting player in an individual's portfolio because of its volatile nature, it is best if paired with another mid- or large-cap fund."

One-third of Schneider Value Fund's portfolio is in financial services, with energy representing more than one-fifth of the portfolio. Top holdings were recently Arch Coal Inc., Chesapeake Energy Corp., J.P. Morgan Chase & Co., Wells Fargo Co., Bank of America Corp., Dell Inc., NVR Inc., Magna International "A", International Rectifier and Consol Energy Inc.

This "no-load" (no sales charge) fund features a low expense ratio of 0.88 percent.

Q. What do they mean when they talk about a benchmark in investing? For example, what are some benchmarks?— S.C., via the internet

A. It is a yardstick to gauge performance of your holdings, indicating how your investment is performing compared to others with similar style and risk.

"If I told you your favorite football team scored 21 points last week, you don't know if that is good unless you know how the other team scored," said Adam Bold, founder of The Mutual Fund Store, Overland Park, Kansas. "The same is true in investments, since the 10 percent your fund earned last year is only good if you know what other funds earned."

Some common benchmarks include the Standard & Poor's 500 Index for large-company stocks, the Russell 2000 for small-company stocks and the EAFE Index for international stocks. The performance numbers of such benchmarks are readily available on financial websites.

Like average investors, mutual fund managers often have benchmarks they seek to equal or beat each year. Their portfolios may replicate the stocks comprising the benchmark or they may instead simply use it as a loose gauge of relative performance.

Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, 555 N. Central Ave., Suite 302, Phoenix, Ariz. 85004-1248, or by e-mail at andrewinv@aol.com.