Jason Gere, an analyst at RBC Capital Markets, says Clorox is one of three domestic household and personal-care companies about which he has "a higher degree of comfort" concerning their ability to drive stronger earnings in a soft economy. The others are Church & Dwight (CHD) and Alberto-Culver (ACV). Gere recently initiated coverage of the sector, with a 12-month price target of 61 for Clorox. The company could average gross margins of 42.8% in fiscal 2009, he notes, up from 41.2% in fiscal '08. Gere projects gross margins of more than 44% in fiscal '10.

Jason Gere, an analyst at RBC Capital Markets, says Clorox is one of three domestic household and personal-care companies about which he has "a higher degree of comfort" concerning their ability to drive stronger earnings in a soft economy. The others are Church & Dwight (CHD) and Alberto-Culver (ACV). Gere recently initiated coverage of the sector, with a 12-month price target of 61 for Clorox. The company could average gross margins of 42.8% in fiscal 2009, he notes, up from 41.2% in fiscal '08. Gere projects gross margins of more than 44% in fiscal '10.

Jason Gere, an analyst at RBC Capital Markets, says Clorox is one of three domestic household and personal-care companies about which he has "a higher degree of comfort" concerning their ability to drive stronger earnings in a soft economy. The others are Church & Dwight (CHD) and Alberto-Culver (ACV). Gere recently initiated coverage of the sector, with a 12-month price target of 61 for Clorox. The company could average gross margins of 42.8% in fiscal 2009, he notes, up from 41.2% in fiscal '08. Gere projects gross margins of more than 44% in fiscal '10.

Though down big time, crude prices seem to be stabilizing around $40-$50 a barrel, and the sharp deterioration in global economic growth has abated, too. This is typically when savvy investors begin to look at oil-service outfits. Schlumberger stock dropped to 35 in February from a high near 115, before popping up to 50 a share. Even with the rally, the stock sells at a price/earnings valuation significantly below its historical median. That represents a good opportunity for a patient investor to pick up shares of the world's best oil-service company at relatively cheap prices ahead of a global recovery. In response to sustained signs of life in the underlying commodity, Schlumberger's shares could rise 20%-25% in the next 24 months, to 60. And if there were a strong global rebound, the stock could wind up 50% higher four or five years down the road.

The beaten-down stock could easily jump 30% as investors come to appreciate Mentor's earnings power and relative insulation from the downturn among chip manufacturers.

Investors inclined to get, or stay, invested while playing a rotation toward more stable names might check out the GMO U.S. Quality Equity III Fund (GQETX). A quantitative, low-cost, large-cap fund, it is up only half as much as the S&P since the March 9 low, but has a good multiyear record and tends to emerge strong from such periods of underperformance.

Financial and consumer stocks were April's big winners, but manufacturers improved, too. More important, a measure of customer inventory fell to its lowest level since July. Will restocking and easier money boost orders? Jefferies' strategists sifted through the firm's buy-rated stocks for economically sensitive producers of durable goods. Their starting lineup include Cogo (COGO), Orbital Sciences (ORB), Esterline Technologies (ESL), Covanta (CVA), ADC Telecommunications (ADCT), Alliant Techsystems (ATK), GrafTech (GTI) and Spirit Aerosystems (SPR).

Financial and consumer stocks were April's big winners, but manufacturers improved, too. More important, a measure of customer inventory fell to its lowest level since July. Will restocking and easier money boost orders? Jefferies' strategists sifted through the firm's buy-rated stocks for economically sensitive producers of durable goods. Their starting lineup include Cogo (COGO), Orbital Sciences (ORB), Esterline Technologies (ESL), Covanta (CVA), ADC Telecommunications (ADCT), Alliant Techsystems (ATK), GrafTech (GTI) and Spirit Aerosystems (SPR).