Food, Soap Stocks Buck the Downward Trend

Colgate-Palmolive -- makers of products such as Lady Speed Stick, Ajax and Hill's pet food -- reported a 19 percent jump in third-quarter earnings today, looking like it's mysteriously sailing full speed ahead directly into the economic headwind.

Yesterday, consumer product giant Procter & Gamble said its third-quarter earnings were up 9 percent.

Anglo-Dutch food and consumer-product titan Unilever posted a 60-percent hike in third-quarter earnings, but that largely came from asset sales. However, backing out the one-time sales, Unilever -- which makes Ben & Jerry's ice cream, Snuggle laundry detergent and Hellman's mayo -- still reported an 8-percent gain in sales.

How are these companies doing it when other giants are scrambling for federal bailout money?

Simple: There are lots of things you can go without during a recession. Food -- even for your pet -- and cleaning supplies are not two of those things.

Further, with commodity prices dropping across the board, these companies are looking at robust fourth-quarter and 2009 earnings, as well.

There is no such thing as a sure-thing stock. Unexpected events, natural or otherwise, can sink a healthy company.

But a long-time mantra on Wall Street goes like this: If you eat it, smoke it, drink it or clean with it, then buy it. (Note: We are not recommending specific stocks, nor will we.)

That's probably sound advice in any economy, as the world continues to be populated by creatures who a) always eat and b) generally clean.

But in tough times, when "consumers" are turning into "savers," it makes even more sense.

-- Frank Ahrens