You still have time to buy fast rising staples like Campbell’s Soup Company (CPB). Fears of economic slowdown have bumped up the soup, soap, and drug companies. This should continue for at least three more months. CPB has gone up in the face of a downgrade. Jim said “when your house does badly, you switch to Campbell’s Pork & Beans.” Price to earnings multiples should continue to expand because mutual funds are not selling these stocks. Kellogg Company (NYSE:K) was also mentioned as a stock they hold onto. Drug maker Eli Lilly and Co (LLY) has “unbelievably great” multiple expansion to the point that they sell at a premium to a faster growing Amgen Inc (AMGN). R.R. Donnelly & Sons Company (RRD) was talked about as a “perfect private equity kind of deal.” The yellow pages publisher is looking at offers and they reinforced that a deal will be made. RRD has twice its substantial cash flow and carries no debt so they are a desirable target. Do not rule out Valero Energy Corp (VLO). This is a big refiner that holds a meeting Thursday. Anyone who needs exposure to oil may want to look to VLO.
Toll Brothers Inc (TOL) may give investors a “house of pain.” A housing slowdown and possible recession led to the conclusion that their may be more selling of this stock.