We're in a recession. You can debate that if you like, but at this point it won't make any difference. The economy stinks, it's getting worse, and it's time to move out of denial and try to heal your portfolio.
Friend of Breakout Simon Baker from Baker Ave Asset Management joined me to explore stock ideas for those not yet so disgusted and afraid of equities that they're clutching their knees against their chest and weeping. The dapper Brit shared four counter-cyclical ideas for those who "really want to own equities."
Still with us, would-be equity owner? Good. Here are Baker's picks with a quick and dirty breakdown:
McDonald's (MCD): My favorite stock of all-time (which I own), Micky-D's recently boosted their dividend by 15%, giving them a yield over 3%. Baker's Price Target: $100; Stop-Loss: $80
Philip Morris International (PM): An attractive combination of defensiveness, earnings growth, and a yield over 4%. Baker's Price Target: $77; Stop Loss: $64
Dollar Tree (DLTR): $325 million in free cash flow, an absurdly good chart, and a business model perfect for a struggling economy. Baker's Price Target: $90; Stop-Loss: $69
Autozone (AZO): A chain of auto supply stores that plays to consumers fixing their cars versus buying new ones. Earnings growth of 28% last quarter and $1 billion in free cash flow. Baker's Price Target: $360; Stop Loss $300
They may not be sexy, at least until you pull up the chart, but that's sort of the point. These are plug and chugger companies churning out strong earnings even in this economy. As always, the ideas are launching points for your own research. In these economic times reading up on these four companies is nothing short of uplifting.

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