With a new stock blowing up almost every day, Wall Street has gone from equity market to mine field. Five-star fund manager Warren Koontz says investors can steer clear of trouble by focusing on a company's debt obligations and cash generation.

"We don't want any debt to be rolling over in the near term, so we are looking at debt expiration," says Koontz, who oversees the $430 million

(LSGIX)

Loomis Sayles Value Fund. "We also like cash. Not only cash-flow generation, but net cash on the balance sheet."

Like most mutual fund managers, Koontz has been hit hard by the bear market, down close to 37% year-to-date. Nevertheless, he is still beating the

S&P 500

by 4.7 percentage points over the past five years. The fund holds nearly 70 stocks and has turnover of 41% per year.

One of his favorite stocks right now is pharma giant

Wyeth

(WYE)

, which he says has strong defensive qualities in a difficult environment.

var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 1906851541; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);

"It's a very good cash flow generator," says Koontz. "The dividend yield certainly is not as high as some of the others at just over 3%, but it has a very good balance sheet and within the pharmas we really like their pipeline."

Outside of health care, Koontz likes

McDonald's

(MCD) - Get Report

balance sheet, as well as its prospects as more people trade down from restaurants like

Applebees

or

Ruby Tuesdays

(RT)

to fast food or quick service restaurants.

"Their same-store sales and their growth has been stellar, particularly in this environment," says Koontz. "And the idea that customers are trading down is not only a domestic phenomenon but it's an international one. And they have strong international sales."

Perhaps surprisingly, Koontz has been buying shares in

Pulte Homes

(PHM) - Get Report

lately, despite the continued devastation in the housing market. Koontz, however, says Pulte is a more conservative choice than one might think due to its hefty cash position.

"Pulte will probably exit 2008 with close to $2 billion of net cash on the balance sheet due to their ability to generate cash and they have no debt rollovers," says Koontz. "We believe they will be a survivor in the business and will emerge from the downturn in a few years in a very attractive situation."

Before joining TheStreet.com, Gregg Greenberg was a writer and segment producer for CNBC's Closing Bell. He previously worked at FleetBoston and Lehman Brothers in their Private Client Services divisions, covering high net-worth individuals and midsize hedge funds. Greenberg attended New York University's School of Business and Economic Reporting. He also has an M.B.A. from Cornell University's Johnson School of Business, and a B.A. in history from Amherst College.