Three Low-Risk Stocks Even Bears Love

These stocks are termed "defensive" by the market-cliche handbook, as they are purchased by portfolio managers who need to own stocks but believe it is not the right time to play offense. They buy the makers of food, toothpaste, beer, cigarettes and drugs because they think their earnings growth will be safe, if far from spectacular.

Evidence of this evolution has come with the revival of stocks such as brewer Anheuser-Busch(BUD Quote), grain giant Archer Daniels Midland(ADM Quote), ketchup king H.J. Heinz(HNZ Quote), cracker cooker Kraft Foods(KFT Quote), candy makers Wm. Wrigley Jr.(WWY Quote) and Hershey(HSY Quote), soda seller Coca-Cola(KO Quote) and snuffmaker UST(UST Quote).

These are exactly the kinds of stocks that move to the fore at the start of a bear market as portfolio managers stock their bomb shelters with companies that will be harmed least by a slowdown in consumer spending.

Anheuser-Busch is particularly appealing, in part because it played this role so beautifully in the millennial bear market, doubling from a multiyear low of $26 in March of 2000 to $53 in October 2002. It could happen again, you know. The company has aroused from a disastrous 2004-2005 with terrific new marketing campaigns, smart acquisitions and a strong push internationally.

Notable on the import front are its decision to promote the great Dutch beer Grolsch and the Singapore beer Tiger in the U.S., along with the Chinese beer Tsingtao, in which it owns a stake. If Anheuser-Busch can achieve 4% to 6% earnings growth over the rest of the year, and up to 10% next year, it will attract many more investors.

Wrigley, like Bud, hit a multiyear low in March 2000 in the mid-$20s. The difference is that Wrigley kept rallying, almost tripling to $73.75 before the November 2005 rally got started. The Chicago-based chewing-gum maker then sank for five straight months as the S&P rallied hard. But now Wrigley has regained its footing.