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What's an Investor to Do? Recession-Proof Stocks

Published: Tuesday, 5 Feb 2008 | 3:35 PM ET

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By: Brooke Sopelsa,
Video Producer

Investors are worried about a recession again. The ISM nonmanufacturing index showed that the services sector--which represents over three-quarters of the U.S. economy, actually shrank in January instead of growing weakly. The markets responded with another selloff.

To help investors weather the storm, CNBC asked the experts for some recession-proof stock picks.

Medical Device Stocks: Healthy Buys

"It looks like it might be a good time to move into Boston Scientific or Johnson & Johnson , one of the two players in the market right now in the U.S., Medtronic down the road, Abbott down the road as well."

Jan Wald, Stanford Group Managing Director

Wald recommends: Boston Scientific [BSX Loading... () ], Johnson & Johnson [JNJ Loading... () ], Medtronic [MDT Loading... () ] and Abbott [ABT Loading... () ]

Value Stocks at a Bargain

"In Cablevision's case, with Verizon Fios, it's really about what the assets are worth, and the dynamics in place to capture full value here...We think what's going to happen here is when Jeff Bewkes at Time Warner splits up the company, Time Warner Cable gets spun out; they become an independent entity, and ultimately go after Cablevision or force [Cablevision's majority owners] to capture a higher value. We think it's probably worth $40 to $44 a share."

Michael Chren, Allegiant Asset Management Portfolio Manager

Chren recommends: Cablevision [CVC Loading... () ] and Sara Lee [SLE Loading... () ]

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Fight the downturn -- trade with CNBC's experts:

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Giant Stocks for Tough Times

“The big guys, the giants, I’m thinking Berkshire Hathaway, Microsoft, GE, these are companies that are taking advantage of the troubles. The tough guys are going to win - Darwinian survivors.”

Michael Holland, Holland & Co. Chairman

Holland recommends: Berkshire Hathaway [BRK Loading... () ], Microsoft [MSFT Loading... () ] and General Electric [GE Loading... () ]

Companies With Emergent Growth

"I would prefer to go with names that have more emergent growth, like Master Card, where you have trends you can play. The overall trend toward plastic, and away from cash, the emerging markets taking hold of that theme, the developing world. These are themes that can boost a company like Master Card to a 40 percent growth rate.”

David Magee, Magee Thomson Investment Partners

Magee recommends: Master Card [MA Loading... () ] and Monsanto [MON Loading... () ]
(Contd.)

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Investor Takeaway:

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The Case for Whirlpool

“Whirlpool is amazing. The company never gave up. They’ve been pumping out Whirlpool Maytag. We haven’t’ seen any merger synergies until this quarter. The Maytag move was great.”

Jim Cramer, Mad Money Host

Cramer recommends: Whirlpool [WHR Loading... () ]