Stock Tickers: BRK/A, LTR, FLO, THS, DLM, NVO, ALO, PYX, AACC, CSH, YUM, HME, DTE, WTR, SNH

Yesterday we gave a first line of defense group of stocks.  That list could have likely been far larger, but in reality there is an entire realm of second tier defense names that are deemed large cap stocks as well.  Some of these could have easily been on the list of 20 top Defensive Stocks yesterday.  Some of these are probably a bit more controversial and may have higher valuations than the traditional lay-up defensive stocks given yesterday.  We weren’t going to run a second list of these, but we wanted to share it since the markets have not recovered much of yesterday’s losses.  Included is a brief explanation for each name:

1) Berkshire Hathaway (BRK/A)
major diversified, one of the few names that actually traded up on days when we had big market crashes; plus you already he know Buffett and successors see value in these companies forever

2) Loews Corp (LTR)
operated in O&G and insurance but has substantial tobacco operations

3) Flowers Foods (FLO)
do people stop eating baked goods?

4) Treehouse Foods
sort of same as Flowers, but with cheaper valuations and smaller market cap

5) Del Monte Foods (DLM)
once again, canned and packaged foods

6) Novo Nordisk (NVO)
insulin for diabetics

7) Alpharma (ALO)
generic and branded drugs, and antibiotic compounds (weak because of earnings)

8) Playtex (PYX)
only not a candidate if women and men eliminate personal products, was going to be on yesterday’s list except Clorox got the post

9) Asset Acceptance (AACC)
buyer of defaulted debt and collection of late or non-payments; aka debt collectors with proprietary systems

10) Cash America Int’l (CSH)
pawn shop operators, the first place people go for cash because they can get their belongings back

11) Yum! Brands (YUM)
rats or no rats this should have been on yesterday’s list, feed your whole family for $15.00 if you want

12) Home Properties (HME)
affordable apartment communities, better valuations and yield compared to most apartment REITs

13) DTE Energy (DTE)
power utilities with better valuations than others, but that is because of Michigan

14) Aqua America (WTR)
expensive valuations for water compared to S&P/Utilities; but a go-to safety net play unless we all stop drinking water, taking showers, and flushing toilets

15) Senior Housing (SNH)
REIT structure of old folks homes around the US with a high yield

As a reminder, before you go out buying everything defensive you have to make sure youare even concerned about a drop of yesterday’s magnitude.  Did the globalmarkets really change that much?  They may have and they may not have.

Jon C. Ogg
February 28, 2007

Jon Ogg is a partner in 24/7 Wall St., LLC and he can be reached at [email protected]; he does not own securities in the companies he covers.

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