Family Dollar Stores (FDO): I think it’s to say that we are in the middle of a nasty recession, and companies like Family Dollar Stores, and Wal-Mart are the names that are likely to benefit the most. Stuck in the middle of its 52-week range, shares of FDO will likely pop based on solid fundamentals, increased demand, and lower input costs to their base products. A move into the low $30s is not totally out of question as there is currently a large short position which could fuel a short covering rally.

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Acuity Brands (AYI): I would actually be short, or stay away from Acuity Brands, a production, and distribution of lighting fixtures firm. Given the massive slowdown in housing, and a total halt to consumer spending, Acuity should be sitting near its 52-week low on the assumption that sales will be pathetic and profit margins substantially weaker than last quarter. A move into the mid-$20s is not totally out of question given the weakening macro-picture for housing and spending. Furthermore, management is likely to issue a horrible earnings outlook for 2009.

Sales for 2008 came in at $787 million, I think the big thing the street is missing here is how Robbins & Myers management revised DEPS guidance three times this year (once in April, $1.93-$2.03, then again in July, $2.26-$2.3). That said, Robbins & Myers is forecasting DEPS of $2.40 to $2.55 for 2009 (from a late November analyst presentation). Robbins & Myers' backlog stands at $268 million. Adjusted EBITDA went from $93 million in third-quarter 2007 to $132 million in fourth-quarter 2008 --- that's a 41% year-over-year increase.

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