Time to Get Defensive

Stock quotes in this article: AAPL , BA , STA , AIG , PG , JNJ , PFE , GSK , DUK , DF , UNH , CMX  

In summary, things are not all that bad in the economy. The real question, in my mind, is just how damaging the currently weak housing market will be to the rest of the economy. Put simply, sector dislocations often take time to fully play out.

For my part, I am a bottoms-up investor, so I will continue to hold stocks like Apple (AAPL), Boeing (BA), St. Paul Travelers (STA) and American International Group (AIG). While everything is economically sensitive to some degree, these stocks are currently enjoying earnings growth that will hold up even with a weaker economy. These growth stories continue to be underappreciated by investors, in my view.

But I do have a generous portion of defensive holdings. For example, I own Procter & Gamble (PG), Johnson & Johnson (JNJ), Pfizer (PFE) and GlaxoSmithKline (GSK). I group these stocks together because they are weak-dollar beneficiaries, but stocks such as Duke Energy (DUK) and Dean Foods (DF) also offer appealing defensive growth opportunities

Other defensive holdings that are currently priced attractively because of investor fear are UnitedHealth Group (UNH) and Caremark Rx (CMX).

  • Loading Comments...
  •  
1 2 3

SHARE:

  • email
  • print
  • comment
  • digg
  • delicious
  • buzz
At the time of publication, Bagley was long Apple, Boeing, St. Paul Travelers, AIG, Procter & Gamble, Johnson & Johnson, Pfizer, GlaxoSmithKline, Duke Energy, Dean Foods, UnitedHealth and Caremark RX, although holdings can change at any time.

Jeffrey Bagley, CFA, is a portfolio manager for McCabe Capital Managers, Ltd. Bagley received a master's of business administration in finance from Fordham University and a bachelor's of science in business economics from the State University of New York at Oneonta. Disclosed holdings may change at any time without notice. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. Bagley appreciates your feedback; click here to send him an email.

The information published in this article is for general information purposes only and Mr. Bagley expressly does not assume any fiduciary relationship or obligations arising from membership to this website. The information presented in this article is not a personalized recommendation or individual investment advice to buy, sell, or hold any investment or security of any kind. The trades recommended by Mr. Bagley may not necessarily constitute appropriate investments for you. You should consult your own financial adviser. Mr. Bagley's articles are based on his personal research and opinions, news and financial data available in the public domain, or other sources that are considered to be reliable, but cannot be guaranteed to be accurate or complete. As Mr. Bagley or his clients may currently be holding, or selling short, securities that are mentioned on this website, he or his clients may financially benefit from any increase or decrease in share value that the public disclosure of his opinions or analysis may generate. Mr. Bagley reserves the right to purchase or sell any security at any time without any prior notice or update on this website. Such trades may even be contrary to previous recommendations. Mr. Bagley also reserves the right not to disclose all of his investments or proprietary analysis.

Recent Comments





Connect with TheStreet

Dow Jones S&P 500 NASDAQ 10-Year Note
10,741.98 1,159.90 2,374.41 36.87
Oil *
79.80
DOWN
37.19
DOWN
5.92
DOWN
16.87
UP
0.15
10 Yr
3.69%
SPDR Gold
108.28
-0.34%
-0.51%
-0.71%
+0.41%
Data delayed 20 minutes

More From TheStreet

Latest Headlines
  • Top Rated Stocks from TheStreet Ratings
  • Find returns with the Dividend Calendar

Brokerage Partners

TheStreet Premium Services

All Services