Stocks of the Week

As any good investor knows, tips are things left for waiters. Ideas, however, are the lifeblood of any dedicated stock picker. Besides the stock-idea fairy, ideas come from a variety of sources, including stock screens, financial news sites, and now, The Motley Fool's CAPS service.

Using a super-secret algorithm, CAPS scans users' existing portfolios of stock selections, and serves up a highly rated stock each weekday. Some of these recommendations are similar to stocks already in a player's portfolio, while others may introduce a new area altogether.

As a sample of CAPS' wizardry, here are the five recommendations it gave me last week:

As smart as the CAPS Stock of the Day algorithm is, it's still just an algorithm, so be sure to look before you leap on any of its suggestions. With that in mind, I thought I'd kick you off with some thoughts on a couple of these ideas.

Don't get chewed up
After the first three days of the new year the S&P was down about 4% -- ouch! Although I don't think we're in for a doomsday scenario, there's been more than enough bad news to go around. The S&P is already down 10% from early October, and it wouldn't be out of the question for it to sag further if the U.S. does head into a recession.

One way to brace your portfolio for recession is to pick up some companies that sell recession-proof products. While a Coach (NYSE: COH) purse might not fall into this category (unless you ask my wife), it's unlikely that people will make an extra effort to cut back on drinking Mott's apple juice or Dr. Pepper, or chewing Trident gum. In addition to selling these types of products, Inside Value pick Cadbury Schweppes also benefits from bringing in more than half of its revenue from outside the U.S.

Good in any market
But you don't need a recession for an investment in Cadbury Schweppes to make sense. Between Trident and Dentyne, the company has two strong brands in the chewing gum market -- one of the fastest growing segments in confections -- and it's planning to focus the business further by selling its American Beverages segment.

The highly ranked Netscribe Consumer Goods sector player gave a bullish thumbs-up to Cadbury Schweppes just under a year ago and concluded, "With strong pipeline of innovation coupled with growth from emerging markets, the company should be in a position to sweeten shareholders' portfolios." And let's not forget that the company also currently hands out a 2.4% dividend yield.

The flip side, though, is that this isn't a stock that you can expect a multibagger from over the next few years. Top-line growth should be reliable, but will likely clock in at the mid-single digits for organic growth. And with it trading at 25 times next fiscal year's earnings estimates, it's not particularly cheap either.

Your turn
But now for the real question: Are you getting your own CAPS Stock of the Day selections yet? If not, what are you waiting for? CAPS is free, and getting your personalized daily picks is much more fun than, say, getting an atomic wedgie from California's Governator.

More CAPS Foolishness:

• 5 Dynamic Dividend Stocks
• 7 Surprising 1-Star Stocks
• 8 Top Stock Blogs.