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MOTOROLA INC. $23 (New York symbol MOT) had to stop shipping its popular Razr mobile phone due to a problem with a component. Most of the phones were still in the inventory of two leading mobile service providers, so the delay will have little impact on sales. Buy. C.R. BARD INC. $68 (New York symbol BCR) has agreed to buy privately held Venetec International Inc. for $166 million. That’s equal to 52% of the $321.1 million or $2.97 a share that Bard earned in 2005 before unusual items. Venetec makes devices that hold catheters, tubes that doctors use to inject drugs into a patient, in place. These devices replace tapes and sutures, which can come loose and raise the risk of infection. Bard is a leading supplier of catheters, so this acquisition looks like a good fit. Buy. ANHEUSER-BUSCH COMPANIES INC. $43 (New York symbol BUD) has agreed to distribute Tiger, the flagship brand of Singapore’s Asia Pacific Breweries, in the United States. This will help Anheuser-Busch take advantage of growing demand for imported beers. Buy.

NEWELL RUBBERMAID INC. $26 (New York symbol NWL; WSSF Rating: Average) took its current form in 1999 when the company acquired Rubbermaid Inc. That turned Newell into one of the world’s biggest makers of household products, such as storage containers, cleaning equipment and tools. It also makes children’s toys and office supply products. Newell sells its products through thousands of retailers, but Wal-Mart accounts for 14% of its total revenue. After the merger, the company began a sweeping restructuring that closed many of its plants and streamlined its remaining operations. The success of this plan lifted the stock to $37 in 2002. However, rising costs for plastics and steel hindered its earnings growth, and Newell’s stock fell to $19 in 2004. It has moved mostly sideways since, but we feel it’s set to rise again.

Second big restructuring in five years

In 2005, Newell launched a new restructuring that aims to save it $120 million a year. Under this new plan, Newell will close a third of its 80 plants, sell more of its less profitable operations and outsource more production to overseas suppliers. It’s also using acquisitions to add more profitable brands to its portfolio, such as its recent $730 million purchase of DYMO, which makes label printing equipment....

DEL MONTE FOODS CO. $12 (New York symbol DLM; WSSF Rating: Extra risk) has agreed to buy the Milk-Bone dog biscuit business for $580 million. However, the benefits of tax losses effectively cut the price to $455 million. To put that in context, Del Monte earned $0.26 a share (total $52.0 million) in its third fiscal quarter ended January 29, 2006. The company recently sold its private soup and baby food operations to help fund its $705 million acquisition of the Meow Mix cat food brand. Pet foods tend to generate higher profits than these other businesses, so these purchases will help Del Monte’s long-term growth. But, it will take several months for the company to integrate these new operations. Del Monte is still a hold.

WASHINGTON MUTUAL INC. $43 (New York symbol WM; WSSF Rating: Average) has a low p/e (10) and high dividend yield (4.7%), partly due to fears that it invested too heavily in the housing boom; this weighs on its stock price. Now, regulators want lenders to retain more of their earnings as a cushion against rising loan losses. That could hurt the company’s ability to raise its dividend. However, these rules would have a greater impact on smaller firms than larger banks like Washington Mutual. The stock is still a buy for growth and income. BORDERS GROUP INC. $25 (New York symbol BGP; WSSF Rating: Average) earned $1.87 a share in its fourth fiscal quarter ended January 28, 2006, up 12.0% from $1.67 a year earlier. These figures exclude unusual items. Sales crept up to $1.5 billion from $1.4 billion. Borders will likely lose between $0.20 and $0.30 a share in the first quarter of fiscal 2007, due to the costs of launching a new loyalty card program and ongoing improvements to its stores. But these moves should pay off in added sales....

APPLE COMPUTER INC. $62 (Nasdaq symbol AAPL; WSSF Rating: Extra risk) is fighting a proposed law in France aimed at spurring competition in the legal music downloading industry. Right now, customers can only listen to songs downloaded from Apple’s iTunes online music store on Apple’s iPod music player. The new law would force Apple to re-program these files to play on other digital music players. That would likely hurt iTunes’ leading share of Europe’s legal music download market, and cut iPod sales. The stock hit $86 in January on strong Christmas demand for iPods. But it has moved down lately on fears that sales of Apple’s new Intel-powered Macintosh computers will lag until more software that takes advantage of the new chip becomes available....

We designed our system to zero in on high-quality stocks with long-term growth potential. That helps us steer clear of companies with big legal problems. Lately, two of our recommendations have dropped sharply due to class-action lawsuits. While these suits are a cause for concern, these two industry leaders should survive these recent setbacks. SHERWIN-WILLIAMS INC. $51 (New York symbol SHW; WSSF Rating: Above average) got as high as $54 in February 2006, but dropped to $37 after a Rhode Island court ruled that the company and two other paint makers are liable for harm caused by lead-based paints. Sherwin stopped making lead paint over 30 years ago, but it and the two other companies could conceivably have to spend over $1 billion to clean up about 250,000 homes in Rhode Island alone. That’s a sizable expense considering that Sherwin earned $463.3 million or $3.28 a share in 2005. However, the court exempted Sherwin from punitive damages. That helped the stock recapture much of the big drop. The stock also got a boost from Sherwin’s improving earnings, which will probably rise to $3.85 a share in 2006. It now trades at just 13.2 times that estimate. The improving earnings also let the company raise its quarterly dividend 22.0%, from $0.205 a share to $0.25. The new annual rate of $1.00 yields 2.0%....

NVIDIA CORP. $57 (Nasdaq symbol NVDA; WSSF Rating: Average) has about 80% of the market for high-end graphic chips that make games and video signals appear more life-like and run smoother on computers and home video game consoles. This business supplies 70% of its revenue. But the company faces strong competition from chief rival ATI Technologies, as well as Intel, which makes less expensive graphics chips. Nvidia now aims to cut its reliance on this niche market by developing chips for other devices, such as cellphones and digital TV sets. However, the cellphone chip market is crowded and prices are falling. In fact, Nvidia’s cellphone chip business lost $34.9 million in the fiscal year ended January 31, 2006, on $58.7 million in sales. To put that in context, Nvidia earned $1.65 a share (total $302.6 million) in fiscal 2006, up sharply from $0.57 a share ($100.4 million) in 2005 (we have not adjusted these per-share figures for a 2-for-1 stock split planned for April 2006). Sales rose 20.0%, to $2.4 billion from $2.0 billion....

FAIR ISAAC CORP. $39 (New York symbol FIC; WSSF Rating: Average) has successfully made its FICO credit scoring system, which calculates the likelihood that an individual will pay back a loan based on prior credit history and other factors, into an industry standard. In fact, 99 of the top 100 U.S. banks, and half of the top 50 banks in the world, use FICO scores to cut their credit risk. In March, three major credit agencies teamed up to launch a new scoring system that will compete with FICO. The FICO system supplies about half of Fair Isaac’s profit, and the news cut the stock from around $44 to $36.50. However, we feel that most of Fair Isaac’s customers would be reluctant to switch to a new, unproven system. Fair Isaac is also doing a good job cutting its reliance on FICO scores with new products, such as software that helps banks and retailers detect fraudulent transactions. Fair Isaac is still a buy for aggressive investors.

MERCURY INTERACTIVE CORP. $33 (Pink Sheets Over-the-Counter market symbol MERQ; WSSF Rating: Extra risk) now trades on the Pink Sheets market, after Nasdaq removed it in January for failing to file its financial statements on time. The company is currently restating its results to correct errors related to the timing of stock options. The restatement will not change Mercury’s reported revenue, regular operating expenses or cash balances. It aims to file its new 2004 results, and 2005 first quarter results, in the next three months. The stock has gained roughly 40% since moving to the Pink Sheets, mostly due to takeover speculation. Mercury has no controlling stockholder, and its unique web site testing software would undoubtedly attract several bidders. However, potential buyers would probably prefer to wait until Mercury completes its restatements before making an offer....