The World’s Safest Stocks Market Sell-Off Edition (VZ)(MO)(ORCL)(MSFT)

When the market drops almost 400 points, investors start to think about 1,000 point drop day. They forget the little run-up the market had over the previous two weeks.

Some of the safest stocks to own are even safer now that they have given up a little on price. They are more likely to have found a bottom than shares which have doubled or tripled over the last two years.

Microsoft (NASD: MSFT) is down to $29. The Vista franchise may falter a bit, but Windows still owns 95% of PC OSs. The company made money last quarter, a lot of it, in every division expect its online operation. Microsoft has over $20 billion in cash. The Yahoo! (NASD: YHOO) buy-out has pushed MSFT shares down but with its huge cashflow from software, that is likely to be temporary.

Oracle (NASD: ORCL) is now the world’s largest supplier of business software.It has been successful in its M&A strategy and management sees no end to its current strong growth. It licenses often extend for several years giving it ongoing earnings power.

Altria (NYSE: MO) is spinning off its international operation. Shareholders will end up owning stock in both companies. Without being tied to US regulations and threats of lawsuits over health issues, the international operation is free to sell coffin nails all over the world. They can make those cigarettes as strong as they would like. Huge cashflow business.

Verizon (NYSE: VZ) Its landline business may be shrinking, but cellular revenue is more than making up for that. New wireless data services should increase operating margins even more. The company has spent most of its capex over the last two years on new fiber-to-the-home for 18 million customers. Now Verizon gets to take the ROI on all of that investment capital. Indications are that cable customer have begun moving to the firm’s fiber offerings.

Douglas A. McIntyre