SYSCO CORP. $23 (New York symbol SYY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 589.9 million; Market cap: $13.6 billion; Price-to-sales ratio: 0.4; WSSF Rating: Average) sells food and kitchen supplies to over 400,000 restaurants, schools, hotels and hospitals in the U.S. and Canada. The company has about 16% of the North American food-service market. In its third fiscal quarter, which ended March 28, 2009, Sysco’s sales fell 4.5%, to $8.7 billion from $9.1 billion a year earlier. The drop came despite a 3.3% increase in food costs, which Sysco passed on to its customers. Earnings fell 6.1%, to $226.2 million from $240.9 million. Earnings per share fell 5%, to $0.38 from $0.40, on fewer shares outstanding. Some of Sysco’s customers are falling behind on their bills because of the recession. In the first nine months of fiscal 2009, Sysco wrote off $61.6 million of loans to its customers, up from $25.9 million a year earlier. In response to falling demand and the loan writeoffs, Sysco has cut its workforce by 6% in the past year....

With President Obama’s climate-change plan now before the U.S. Senate, a number of investors have been wondering if now is a good time to “green” their portfolios with environmentally friendly companies. Regardless of the Senate’s decision, we still think there are a number of green stocks with investment appeal. But you’ll want to use caution when looking for opportunities in this area. Many green stocks may need a long time to move from the research or concept stage to profitability. As well, the recession has cast doubt on the future of some government subsidies for green stocks. However, we continue to recommend a number of companies that are now involved in, or are planning to expand into, green technology and green power production. We focus on those that have a sound base of other operations to offset these added risks....

Small caps are companies with a “market cap” (the value of shares they have outstanding) below $250 million, or some other arbitrary figure. Many investors think of the “small cap group” as the place to look for aggressive investments, such as junior companies that will develop into seniors and make huge gains for investors. Some small caps will indeed turn out that way, but they’re a minority. In fact, small caps are a widely varied bunch. The top small caps are well-established giants within small but growing fields. However, many small caps are start-ups that have yet to make their first profit. Some succeed brilliantly, and these are the hot small cap stocks we aim to help you spot in our Stock Pickers Digest newsletter, but lots of others go broke. Then too, some small caps are former large-cap companies that have terminal problems. They trade as small caps on their way to zero....

Lately we’ve heard from some investors who are unhappy with some of their investments, particularly their more aggressive investing picks. They want to rebuild their portfolios, but are reluctant to sell anything at today’s lower prices. We think that’s a mistake. Obviously you want to think things through and make sure you are not holding low-quality investments, or investments that are wrong for your portfolio. Once you’ve done that, our view is that you should switch to higher quality and more appropriate investments right away. You have nothing to gain by making back any losses you may have in the same aggressive investing selections that gave you those losses. Nor are you any more likely to regain your losses by holding on to the same stocks. In fact, if your investments are genuinely poor quality (rather than simply a bad aggressive investing choice for you), there’s a risk that they will cost you even more money, the longer you hold them....

TOYOTA MOTOR CO. ADRs $76 (New York symbol TM; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.6 billion; Market cap: $121.6 billion; Price-to-sales ratio: 0.6; WSSF Rating: Above Average) is the world’s largest carmaker. Japan accounts for 47% of its revenue, followed by North America (24%), Europe (12%) and Asia (10%). In the fiscal year ended March 31, 2009, Toyota sold 7.6 million vehicles, down 15% from 8.9 million in the prior year. As a result of the drop, Toyota lost $4.3 billion, or $2.55 per ADR, in fiscal 2009. (Each American Depositary Receipt represents two of Toyota’s common shares.) It earned $17.5 billion, or $8.77 per ADR, a year earlier. Revenue fell 9.1%, to $203.3 billion from $223.6 billion. Toyota’s sales will likely fall to 6.5 million vehicles this year. The company is lowering its costs in response. For example, its smaller cars will share the same platform and parts by 2012. That should save $1 billion a year....

HONDA MOTOR CO. ADRs $27 (New York symbol HMC; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.8 billion; Market cap: $48.6 billion; Price-to-sales ratio: 0.5; WSSF Rating: Above average) is Japan’s second-largest carmaker. It’s also the world’s largest motorcycle producer. Honda sold 3.5 million vehicles in fiscal 2009. That’s down 10.4% from 3.9 million in the prior year. However, motorcycle volumes rose 8.5%, to 10.1 million from 9.3 million. Revenue fell 14.9%, to $101.9 billion from $119.8 billion a year earlier. Earnings plunged 76.7%, to $1.4 billion, or $0.77 per ADR, from $6 billion, or $3.30 per ADR. (Each American Depositary Receipt represents one Honda common share.) The earnings drop was mostly because of lower sales, higher raw-material costs and the negative impact of the high Japanese yen. North America accounts for 45% of its sales, so it’s more vulnerable to currency movements than Toyota. Honda’s small, fuel-efficient cars should continue to appeal to cost-conscious consumers during the recession. Like Toyota, it also aims to lower its costs by building more models that use the same parts. This year’s earnings will probably drop to $0.37 per ADR, but should rebound to $1.15 in fiscal 2011. The stock trades at 23.5 times the 2011 estimate. The $0.46 dividend yields 1.7%....

KRAFT FOODS INC. $26 (New York symbol KFT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.5 billion; Market cap: $39 billion; Price-to-sales ratio: 0.9; WSSF Rating: Above Average) is the world’s second-largest food company after Nestle. Top brands include Kraft (cheese), Maxwell House (coffee), Nabisco (biscuits and cookies) and Oscar Meyer (meats). Kraft faces strong competition from private-label foods, particularly in some of its main product lines, such as cheese, coffee and processed meats. But it has been helped by lower costs for a number of its raw materials, especially dairy products. In the three months ended March 31, 2009, Kraft’s revenue fell 6.5%, to $9.4 billion from $10 billion a year earlier. However, if you account for last year’s sale of its Post cereals business and the negative impact of currency rates on overseas sales, Kraft’s revenue rose 2.3%. Overall earnings rose 21%, to $662 million from $547 million. Earnings per share rose 28.6%, to $0.45 from $0.35, on fewer outstanding shares....

DEL MONTE FOODS CO. $9.02 (New York symbol DLM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 197.7 million; Market cap: $1.8 billion; Price-to-sales ratio: 0.5; WSSF Rating: Average) makes a wide variety of canned fruits and vegetables, as well as sauces and soups. Del Monte also makes pet food under the 9Lives, Milk-Bone and Meow Mix brands. In the fiscal year ended May 3, 2009, Del Monte’s earnings rose 25.5%, to $147.7 million, or $0.74 a share. In the prior year, it earned $117.7 million, or $0.58 a share. If you exclude an $0.08-a-share charge related to job cuts in the prior year, per-share earnings would have risen 12.1%. Sales rose 14.1%, to $3.6 billion from $3.2 billion. Del Monte is raising the prices of its main brands, and spending more on marketing. It hopes these moves will make these products more profitable....

CAMPBELL SOUP CO. $29 (New York symbol CPB; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 350.3 million; Market cap: $10.2 billion; Price-to-sales ratio: 1.3; WSSF Rating: Above Average) is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices. Like Heinz Campbell plans to spur growth by expanding overseas. International markets now supply 30% of its revenue. It is particularly interested in Russia and China, where soup is popular. As a result of its growing international operations, unfavourable currency rates held back Campbell’s earnings by $0.04 a share in its third fiscal quarter, which ended May 3, 2009. The company’s sales fell 10.3%, to $1.7 billion from $1.9 billion. Currency rates accounted for about half of the decline....

H.J. HEINZ CO. $35 (New York symbol HNZ; Income Portfolio, Consumer sector; Shares outstanding: 315 million; Market cap: $11 billion; Price-to-sales ratio: 1.1; WSSF Rating: Above Average) is a leading maker of condiments. Its flagship product, Heinz Ketchup, makes up about 60% of all ketchup sold in the U.S. Heinz also makes frozen potatoes (under the Ore-Ida brand), pasta sauces (Classico) and diet foods (Weight Watchers). Heinz has expanded its overseas operations over the last few years. These now account for about 60% of its sales. And the company plans to keep adding new markets: it’s particularly interested in China, India, Russia and Poland. However, Heinz’s international growth adds currency risk. In its latest fiscal year, which ended April 29, 2009, sales rose just 0.8%, to a record $10.15 billion from $10.07 billion in the prior year. But excluding the negative impact of the higher U.S. dollar, sales would have risen 7.4%. The company raised its selling prices, which helped offset a 1.5% drop in volumes. Earnings rose 9.3%, to $923.1 million from $844.9 million. Earnings per share rose 10.3%, to $2.90 from $2.63, on fewer outstanding shares....