PEPSICO INC. $52 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.6 billion; Market cap: $83.2 billion; Price-to-sales ratio: 1.9; WSSF Rating: Above Average) is one of the world’s largest food companies. PepsiCo’s main products include soft drinks (Pepsi-Cola), snack foods (Frito-Lay), sport drinks (Gatorade), fruit juices (Tropicana) and cereals (Quaker Oats). PepsiCo owns 18 brands that each generate annual sales of over $1 billion. PepsiCo continues to do a good job of increasing its sales and earnings in a highly competitive industry. Moreover, it’s cutting its costs with a new restructuring plan, that includes closing plants and laying off 2% of its employees. The plan should save PepsiCo a total of $1.2 billion over the next three years, including between $350 million and $400 million this year. PepsiCo may use the cash that these savings free up to expand advertising this year, which should lift the company’s sales. In 2008, PepsiCo’s sales rose 9.6%, to $43.3 billion from $39.5 billion in 2007. Earnings rose 5.4%, to $5.9 billion from $5.4 billion. PepsiCo is an aggressive buyer of its own shares, so earnings per share rose 9.2%, to $3.68 from $3.37 on fewer shares outstanding. These figures exclude unusual items, mainly severance payments....

GENERAL ELECTRIC CO. $10 (New York symbol GE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 10.6 billion; Market cap: $106 billion; Price-to-sales ratio: 0.6; WSSF Rating: Above Average) has lost its AAA credit rating due to concerns over the quality of assets held by GE Capital, GE’s finance division. GE Capital profits from the difference between the rate it charges borrowers and the rate it pays to its bondholders. The lower rating will force it to pay higher interest on new bonds. Still, GE expects GE Capital to be profitable in the first quarter of 2009. GE aims to shrink GE Capital’s contribution to its overal profit, to 30% from 50%. This cuts GE’s risk. As well, GE’s industrial businesses, such as locomotives and power-plant turbines, should benefit from new government spending on infrastructure. GE is a buy.

Agilent and Verigy are leaders in two tech niches. The recession has hurt both companies, but their strong balance sheets and tightly controlled costs should help them survive. Meanwhile, their high research spending will let them keep developing new products. This will pay off in sales and earnings gains when the economy improves. AGILENT TECHNOLOGIES INC. $16 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 345.3 million; Market cap: $5.5 billion; Price-to-sales ratio: 0.2; WSSF Rating: Average) makes testing systems that help electronics manufacturers improve the quality of their products. Agilent also makes measurement equipment for medical research labs and drug companies. Demand for Agilent’s medical-related products remains steady, but the recession has hurt sales of cellphones and other electronic devices. As a result, manufacturers are spending less on the company’s testing equipment. In response, Agilent plans to drop some of its businesses and shrink its workforce by 3%. The company expects to pay $100 million in severance and other expenses. But these moves should lower Agilent’s costs by $150 million a year, and let it keep spending 14% of its sales on research....

ADOBE SYSTEMS INC. $22 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.2 million; Market cap: $11.5 billion; Price-to-sales ratio: 3.4; WSSF Rating: Average) is down from its August 2008 level of $46. This is partly because the recession has prompted users to postpone upgrading their Adobe software. Adobe plans to take advantage of the slump by acquiring other software companies, probably at bargain prices. It’s particularly interested in smaller companies that specialize in software for cellphones. This would let Adobe take advantage of growing consumer demand for downloadable video and music files. Adobe holds cash of $2.4 billion, or $4.47 a share. Its long-term debt is just $350 million, so it can easily afford to expand. Adobe is a buy.

The recession has lowered shipping volumes at Arkansas Best and FedEx. However, both are aggressively cutting their costs, which should help them stay profitable. Lower fuel prices will also help them cope. Moreover, their low debt and large cash reserves give them long-term appeal. ARKANSAS BEST CORP. $20 (Nasdaq symbol ABFS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 25.3 million; Market cap: $506 million; Price-to-sales ratio: 0.3; WSSF Rating: Average) specializes in “less-than-truckload” shipping. This involves loading freight from a number of customers onto a single truck. Arkansas Best carries a wide range of goods, from food and textiles to clothing and furniture. As the economy began to slow in 2008, Arkansas Best decided to maintain its rates. It felt that its strong reputation would help it hang on to its customers. However, freight volumes fell 15% in the fourth quarter, and the company had to lower its rates in order to to stay competitive....

NORDSTROM INC. $16 (New York symbol JWN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 215.4 million; Market cap: $3.4 billion; Price-to-sales ratio: 0.4; WSSF Rating: Average) operates 169 department stores that cater mainly to upscale shoppers. Last month, its same-store sales fell 15.4% compared to February 2008. In response, the company has scaled back its expansion plans and tightened its credit-card policies. Nordstrom has also brought in more lower-priced merchandise, which should lift its sales. Nordstrom’s reputation for good customer service and its loyal customer base should help it cope with the recession. The stock trades at 13.4 times its probable 2009 earnings of $1.18 a share. The $0.64 dividend still appears secure, and yields 4.0%. Nordstrom is a buy.

PetSmart and Idexx reported higher earnings and sales for 2008. The recession could prompt people to spend less on their pets this year. Still, both companies are in a good position to profit when the economy picks up. PETSMART INC. $21 (Nasdaq symbol PETM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 127.1 million; Market cap: $2.7 billion; Price-to-sales ratio: 0.5; WSSF Rating: Above Average) sells pet food and supplies through 1,112 stores in the U.S. and Canada. PetSmart opened 112 new stores in its latest fiscal year, which ended February 1, 2009. It also opened 45 new in-store PetHotels, which look after pets while their owners are out of town. PetSmart now has 142 PetHotels. As a result of the expansion, sales rose 8.4%, to $5.1 billion from $4.7 billion in the previous year. Same-store sales rose 3.8%....

GENERAL MILLS INC. $50 (New York symbol GIS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 329 million; Market cap: $16.5 billion; Price-to-sales ratio: 1.2; WSSF Rating: Above Average) earned $0.79 a share in its third fiscal quarter, which ended February 22, 2009. This is down 9.2% from $0.87 a year earlier. (These figures exclude writedowns of certain commodity-trading contracts and other unusual items.) The drop was largely caused by higher costs for the ingredients General Mills uses to make its cereals and other foods. These costs should fall over the next few months. Sales rose 3.9%, to $3.5 billion from $3.4 billion. General Mills expects to earn $3.88 a share in fiscal 2009. The stock trades at 12.9 times this estimate. That’s reasonable in view of its top brands and rising demand for eat-at-home meals. General Mills is a buy.

SONY CORP. ADRs $22 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1 billion; Market cap: $22 billion; Price-to-sales ratio: 0.3; WSSF Rating: Above Average) has struck a new alliance with Internet search engine Google. Sony hopes the new arrangement will spur sales of its Sony Reader electronic book device. Over the past few years, Google has converted several million books into electronic form. Under this new deal, users of the Sony Reader can download titles from Google for free, but only books whose copyrights have expired. Still, that’s over 500,000 titles. This deal should help Sony’s device compete with the popular Kindle book reader from online bookseller Amazon.com. Sony is a buy. FAIR ISAAC CORP. $14 (New York symbol FIC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 48.8 million; Market cap: $683.2 million; Price-to-sales ratio: 0.9; WSSF Rating: Average) is changing its corporate identity to FICO. (FICO is an acronym for Fair Isaac Corp.) Fair Isaac is still the company’s legal name, but it will now be known as FICO. Its ticker symbol is unchanged....

XEROX CORP. $4.88 (New York symbol XRX; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 864.8 million; Market cap: $4.2 billion; Price-to-sales ratio: 0.2; WSSF Rating: Average) cut its workforce by 5% last year because of slowing sales of its copiers and printers. This reduction should lower its expenses by $250 million a year. If you exclude severance and other charges, Xerox earned $985 million, or $1.10 a share, in 2008. Xerox’s sales fell 19% in the first two months of 2009. In response, it’s planning a new round of cost cuts, including freezing salaries. This new plan will save Xerox an additional $300 million. Xerox is still a leader in its field, and its products help businesses cut their expenses by reducing their paper use and streamlining information flows. However, the stock will likely make little progress until the recession ends....