5 Stocks That Don't Need Ben Bernanke

Yesterday, the major U.S. indices dropped due to comments from Federal Reserve Chairman Ben Bernanke.

Thanks, Ben.

As is often the case when it comes to something like this, the explanation of exactly what ticked off investors varied a bit depending on what news source you turned to. Articles from both the Associated Press and Forbes magazine seemed to focus on Bernanke's less-than-cheery assessment of the economic recovery. Coverage from Bloombergand The Wall Street Journal, meanwhile, honed in on the fact that the Fed chief said the banking body wouldn’t be taking any additional stimulative actions right now.

What really spooked investors? I tend to lean towards the latter. It should be news to no one at this point that there is plenty of economic uncertainty. But the fact that the Fed isn't stepping in to turn up the voltage even further on its economic defibrillator probably has impatient investors stamping their feet.

If your blood pressure stayed level through this, I'd have to guess that one -- if not many -- of the following factors is working in your favor: You know the Fed isn't really going to be able to fix anything on its own, you are a level-eight Zen investor that never flinches during day-to-day fluctuations, or ...

You own the right stocks
The right stocks don't have to be ones insulated from the U.S. economy. Right now, I'm pretty happy owning industrial giant 3M (NYSE: MMM  ) even though a sluggish U.S. economy will provide a drag on the company's industrial, transportation, consumer, and office business lines.

However, it certainly doesn't hurt to have at least a few stocks in your portfolio that yawn rather than shiver when newscasters start talking about our economic troubles.

One way to achieve this is to look overseas. Investors in China Mobile, for instance, should be much more concerned with issues like the state of Chinese economy, China Mobile's ability to sign up new cellular customers, and the country’s regulatory changes. The action or inaction of Ben Bernanke should barely even register in that investment math.

Five nose-thumbers
For U.S. investors that want to stick closer to home though, there are also U.S.-based companies better positioned to ride out economic uncertainties. Here's a look at five of my favorites:

Company

Business

Forward P/E Ratio

Expected
Long-Term Growth

Wal-Mart (NYSE: WMT  )

Retail

12.6

11%

Pfizer (NYSE: PFE  )

Pharmaceuticals

6.7

3%

Altria (NYSE: MO  )

Tobacco

11.4

8%

Walgreen (NYSE: WAG  )

Drug stores

12.2

14%

Las Vegas Sands (NYSE: LVS  )

Gaming

54.3

85%

Source: Capital IQ, a Standard & Poor's company.

These stocks made the list for two reasons: First, the company has the ability to meet growth projections even without a robust economic recovery. Past that, I believe each could be a compelling investment opportunity right now.

Retail in general isn't the best place to be when the talk is about economic sluggishness -- particularly when the consumer is the heart of the problem. Wal-Mart is a standout in the retail sector, though, because of its laser-like focus on being the low-cost leader. For obvious reasons, this makes Walmart stores a key consumer destination during tough times. And if times do get better? Wal-Mart will probably lose some of the customers that traded down, but it should also see a bump in overall volume from its core customer base.

Though they're not primarily economic ones, Pfizer has some serious headwinds nonetheless. The company will have to deal with the loss of major drug patents in the coming years, including this year's expiration of Lipitor's patent. At the same time, it will have to navigate the new post-reform world of U.S. healthcare. Investors, though, have left Pfizer's stock for dead, and I think the current price tag leaves plenty of opportunity for investors with the patience to wait for the market to realize the company isn't terminal.

Looking at Altria, we don't have to go much further than Econ 101. Remember demand elasticity? Well, tobacco products are highly inelastic, and that lets Altria laugh in the face of recession. Need we say more? I don't think so.

Sales of prescription drugs are the bread and butter of Walgreen's business. In 2009, the company pulled in 65% of its total revenue from this. More than 95% of that business came via third-party sales, meaning that either a managed care organization, the government, or a private insurer paid for the prescription, rather than the consumer. What do you think that means for Walgreen's business when millions of Americans are newly insured under the health-care reform bill? Economic troubles or not, Walgreen at a 12-times forward earnings multiple looks like a steal to me.

If we were playing a round of "one of these things is not like the others," then Las Vegas Sands would definitely be the answer. The company is in an economically-sensitive sector, it has a huge earnings multiple, and growth projections seem downright outlandish. But Sands' inclusion is no mistake.

Unlike competitor MGM Mirage (NYSE: MGM  ) , Sands has been focusing on the overseas markets for its growth. By 2011, the company expects that 83% of its total adjusted property EBITDA will come from Asia. The company recently opened its massive Marina Bay Sands resort in Singapore, and it has some impressive developments on Macau's Cotai Strip on deck. Sure, Sands is easily the riskiest of the bunch, but it presents a pretty compelling opportunity that is definitely not dependent on Ben Bernanke and his printing machines.

Do you have your eye on some other stocks that can defy the U.S. economy? Head down to the comments section and share your thoughts.

If Las Vegas Sands caught your eye, you may be interested in these tantalizing stocks that investors have been scared of.

3M, Pfizer, and Wal-Mart Stores are Motley Fool Inside Value choices. The Fool owns shares of China Mobile. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Matt Koppenheffer owns shares of 3M and Wal-Mart, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool’s disclosure policy assures you no Wookies were harmed in the making of this article.


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