Roundtable: The Next BP

The BP (NYSE: BP) oil spill has taken a company most of us viewed as a rock-solid blue chip and made it into a speculative play as we weigh litigation, regulation, takeover, and even bankruptcy scenarios.

To try to avoid the next big fall from grace, I asked some of our top analysts this question:

Which company out there seems like a safe investment but isn't?

Here are their answers.

Morgan Housel, Fool contributor
I'm going to torture this question a bit, because this an important point to make: In the sense that I think BP could be a great buy at today's prices as investors irrationally panic over potential fallout costs, the next BP -- or really what's been a perpetual BP -- is Altria Group (NYSE: MO).

Altria has been facing serious litigation risk for the better part of 30 years. Sure, one of these lawsuits could turn the company upside-down. But brave investors willing to acknowledge that the odds of this happening are slim have made out like bandits. Altria Group was the top-performing stock from 1957 to 2003, returning nearly 20% a year. Most of these returns, ironically, came from Altria's share price staying low amid litigation fears, which made reinvesting dividends a serious bargain. You got a lot of bang for your reinvested buck.

So whether BP is the next Altria or Altria is the next BP, remember this: Litigation fear plus social disgust usually equals big returns for brave investors.

Tim Beyers, Fool contributor and Rule Breakers analyst
If the standard is risk, then Apple (Nasdaq: AAPL) is the next BP. This isn't going to be a popular view, and it may even be crazy. (Can you think of a company greener than Apple? The Mac maker recycles computers and has taken care to remove mercury from its products.)

Nevertheless, the parallel works. A major iPhone security breach could compromise 50 million users globally. With the amount of personal and financial data these devices now hold, the resulting fallout could cost Apple more than the $1.25 billion BP has already spent cleaning up the Gulf of Mexico. Competitors such as Motorola (NYSE: MOT) and Research In Motion (Nasdaq: RIMM) would sop up the benefits via switching programs, pitching security in an unsafe digital world.

Admittedly, this is the worst-case scenario, and I believe Apple will plug the holes in its iPhone OS before any sort of cataclysmic event occurs. But if good investing is about anything, it's about understanding risks and getting appropriately compensated for taking them. Today's Apple shareholders -- Yours Truly included -- face more risk than we have in years.

Matt Koppenheffer, Fool contributor
Like Tim, I also chose Apple. Not only do many people seem to think that Apple is a safe investment, but many seem to think it is the investment to be in right now. I disagree.

Now, don't get me wrong. I don't foresee an explosion at an iPad manufacturing plant or an iTunes music spill that will pollute the airwaves with an unbearable din of Ke$ha and Katy Perry (shudder). However, as an investment, I think Apple is more dangerous than many investors seem to think.

The reason is simple: good news. The Apple story has been absolutely awash with good news lately. Even if Google's (Nasdaq: GOOG) Android has been kicking butt and taking names, the iPhone is still doing plenty of damage in the smartphone world. Meanwhile, hotcakes only wish they sold like iPads.

But with all of that good news pouring in for a $227 billion company with a trailing price-to-earnings ratio of 21 on its stock, I worry about what happens when that good news eventually (and it will) turn into just OK or even bad news.

Rick Munarriz, Fool contributor and Rule Breakers analyst
I think Microsoft (Nasdaq: MSFT) will be the next blue chip to go black and blue. Revenue outside Windows fell in its latest quarter, and Microsoft's operating system stronghold will fade in the coming years as Google's Android, Palm's webOS, and other open-source platforms become the building blocks of lighter computing. There are cheaper cloud-computing threats to Microsoft's Office empire. Bing is a hit, but Microsoft continues to run its online division at a loss. Its Xbox business is marginally profitable, but the industry itself has stagnated. It's holding up well on the server-software front, but profit margins there lag Microsoft's meatier Windows and Office juggernauts.

Microsoft isn't going away, but I can't see it being the country's third most valuable company in a few years, the way it is now.  

Those are our candidates for the next BP. Share yours in the comments section below.