The recession has forced many consumers to cut their restaurant visits. When they do go out, many are switching to less-expensive establishments and skipping extras, like appetizers and dessert. Consumers are also waiting for sales instead of buying groceries at regular prices. These factors are bad news for Sysco and Supervalu, two of the largest food sellers in the U.S. Both are cutting costs, which will help them stay profitable for now. However, both need a sustained economic recovery to start growing again. 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....

GANNETT CO. INC. $6.26 (New York symbol GCI; Conservative Growth Portfolio, Consumer sector: Shares outstanding: 232.4 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.2: WSSF Rating: Average) will start selling an online edition of USA Today, its flagship newspaper, in August. The company already sells an electronic version of USA Today through Amazon.com’s Kindle e-book reader service. Online newspapers face strong competition from free Internet news sources. But USA Today aims to use exclusive content to attract online subscribers. As well, unlike the print version, the online edition will publish a weekend edition. Moreover, online publishing is cheaper than printing and delivering newspapers, so Gannett needs fewer subscribers to earn a profit on this project. Gannett is a buy.

WELLS FARGO & CO. $24 (New York symbol WFC; Conservative Growth Portfolio, Finance sector; Shares outstanding: 4.7 billion; Market cap: $112.8 billion; Price-to-sales ratio: 1.8; WSSF Rating: Average) earned a record $3.2 billion in the second quarter of 2009. That’s up 80.9% from $1.8 billion a year earlier. Last January’s purchase of rival banking firm Wachovia Corp. was the main reason for the gain. Wells Fargo issued shares to help pay for Wachovia. It also sold shares to the public in May so it could better absorb higher loan losses during the recession. These moves increased the number of shares outstanding by 41%, so per-share earnings rose just 7.5% in the quarter, to $0.57 from $0.53. Revenue jumped 96.4%, to $22.5 billion from $11.5 billion. Wachovia accounted for 39% of Wells Fargo’s second-quarter revenue. The recession continues to hurt the quality of the company’s loan portfolio. It raised its loan-loss provisions by 68.9% in the latest quarter, to $5.1 billion from $3 billion a year earlier. However, Wells Fargo’s management feels the Wachovia merger will let it cut its annual expenses by $5 billion. This should help offset the higher loan losses. Wells Fargo is a buy....

FAIR ISAAC CORP. $18 (New York symbol FIC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 48.9 million; Market cap: $880.2 million; Price-to-sales ratio: 1.4; WSSF Rating: Average) sells products and services that help businesses evaluate customer creditworthiness. Its earnings shrank with the end of the subprime boom in 2007. But thanks to cost cuts, its earnings are now rising again, despite a drop in sales. In its third quarter, which ended June 30, 2009, Fair Isaac’s earnings per share fell 2.6%, to $0.37 from $0.38 a year earlier. But the latest earnings include an $0.08-a-share charge related to the sale of two businesses that help telecom companies detect and prevent fraudulent use of their networks. If you exclude all unusual items, per-share earnings actually rose 9.8%, to $0.45 from $0.41, even though sales fell 14.9%, to $156 million from $183.3 million. Fair Isaac continues to devote nearly 12% of its revenue to research. This helped it launch FICO08, the latest version of its widely used FICO credit-scoring system. Over 400 lenders are now using or testing FICO08, which Fair Isaac feels is twice as accurate as previous versions....

VERIZON COMMUNICATIONS INC. $32 (New York symbol VZ; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 2.8 billion; Market cap: $89.6 billion; Price-to-sales ratio: 0.9; WSSF Rating: Average) gets 70% of its profits and 45% of its revenue from its wireless division, which consists of its 55% stake in Verizon Wireless. (U.K.-based Vodafone plc owns the other 45%.) Verizon Wireless has 87.7 million customers in 50 states. The remainder comes from the traditional telephone division, which has over 35 million household and business clients in 25 U.S. states. In the past few years, Verizon has built up its wireless business and cut its reliance on its traditional phone operations. That helped its revenue rise from $71.3 billion in 2004 to $97.4 billion in 2008. Earnings fell from $2.59 a share (or a total of $7.3 billion) in 2004 to $2.36 a share (or $6.8 billion) in 2007, but rebounded to $2.54 a share (or $7.2 billion in 2008).

Alltel added 13 million wireless users

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ARKANSAS BEST CORP. $26 lost $0.62 a share in the second quarter of 2009. That includes $0.12 a share in unusual expenses for non-union health-care and pension costs. It earned $0.63 a share a year earlier. The recession has hurt trucking volumes and freight rates; this was the main reason that revenue fell 27.3%, to $362.6 million from $498.5 million....

UNITED TECHNOLOGIES CORP., $52.23, New York symbol UTX, makes a variety of products for the aerospace and construction industries. Its main subsidiaries are Pratt & Whitney (jet engines), Hamilton Sundstrand (aircraft electronics), Carrier (heating and air conditioning) and Otis (elevators). The recession continues to weigh on many of United Technologies’ clients. As a result, the company’s revenue fell 17.2% in the three months ended June 30, 2009, to $13.2 billion from $15.9 billion a year earlier. As well, United Technologies gets about 50% of its revenue from overseas operations, so unfavourable foreign-exchange rates accounted for about a third of the drop. Earnings in the quarter fell 23.5%, to $976 million, or $1.05 a share, from $1.3 billion, or $1.32 a share. However, if you exclude severance costs and other one-time items, the company would have earned $1.21 a share in the latest quarter. That beat the $1.04 that analysts were expecting....

INTUITIVE SURGICAL, $222.53, symbol ISRG on Nasdaq, jumped almost 31% this week after it reported improved results in the latest quarter. Intuitive makes the “da Vinci,” a computerized surgical system. Guided by a miniature camera connected to a 3-D monitor, surgeons use the da Vinci to operate by remotely manipulating tiny robotic arms. This is safer and far less invasive than regular surgical techniques, and helps cut a patient’s recovery time and post-operative discomfort. It also reduces scarring and infection risk. The da Vinci system is used in heart surgeries, prostatectomies and hysterectomies, among other procedures. In the three months ended June 30, 2009, Intuitive’s revenue rose 18.9%, to $260.6 million from $219.2 million a year earlier. Earnings climbed 21.9%, to $62.4 million, or $1.65 a share, from $51.2 million, or $1.32 a share. These results beat analysts’ expectations of $1.25 a share in profits on revenue of $230 million....

CYBERPLEX $1.54 (Toronto symbol CX; SI Rating: Speculative) (416-597-8889; www.cyberplex.com; Shares outstanding: 64.8 million; Market cap: $99.7 million) sells a service that matches advertisers with electronic publishers. Cyberplex links advertisers’ campaigns with its 10,000 or so affiliates, which include web-site operators, bloggers and email marketers. Advertisers only pay if Cyberplex’s campaigns prompt users to do something, such as a fill out an online form or register at a web site. At the peak of the dot-com bubble of 2000, Cyberplex’s share price climbed as high as $35, and it had a market cap of almost $1 billion. Most of Cyberplex’s clients are smaller companies, such as Netflix, eHarmony and AcaiBerry Detox. But it also serves a number of larger organizations, including the U.S. army, DirecTV, FTD, Xerox, Sony Canada, IAC, Atlantic Lottery Corporation, Vista Print, Aecon, Ontario Power Generation, Scotia Bank and Royal Bank of Canada....

TEMPUR-PEDIC $14.17 (New York symbol TPX; SI Rating: Speculative)(800-878-8889; www.tempurpedic.com; Shares outstanding: 74.9 million; Market cap: $1.1 billion) trades at over three times its March low of $4. At times like this, some investors feel tempted to hold off on new buying and “wait for a dip”, as the saying goes. That could be a mistake. The problem with waiting for a dip is that you’ll always get a dip in your worst choices. They may put on a series of dips, in fact. But you rarely see much of a dip in your best choices. Best choices often just keep on rising....