Two Stocks to Cure the Bernanke Blues

As people continue to gorge themselves and become diabetic and depressed, Hi-Tech Pharma (HITK Quote) is a cheap stock that should prosper, and Bed Bath & Beyond(BBBY Quote) is an expensive consumer-sensitive stock that should give your portfolio a little protection if the economy really is on the rocks.

The Scorned Little Pharma

Hi-Tech manufactures and sells prescription and over-the-counter generic drugs. This is my kind of company: Everybody hates it. If the economy slows significantly, drugs will continue to do well, so these are the kind of stocks you want to own. The company has been guiding down lately and the market is unhappy, as demonstrated by the stock's retreat from near $30 to $10 over the past 52 weeks.

At this price, I believe risk is diminished. If we step back and take a broader examination of the company's performance, it is rather impressive. From 2002 to 2006, the company grew revenue from $33 million to $78 million and grew profit from 31 cents a share to 85 cents a share, for a healthy annual growth rate of close to 20%. The trouble is, 2007 isn't looking so rosy with revenue and profit declining by that rate or higher.

The recent declines in revenue and profit come as some of the company's products in its generic division are experiencing slowing demand and pricing pressures. So what's to like?

I like Hi-Tech's risk-reward dynamic. The company continues to aggressively pursue growth by developing and acquiring rights to new generic products. According to Hi-Tech's most recent 10-K, the company has 12 ANDA applications pending at the Food and Drug Administration that address more than $2 billion in annual product sales in the U.S. in 2005, according to IMS Health, a leading provider of market information to the pharmaceutical and health care industries.