A Bear's-Eye View

A good defense is the best offense--even now, with the Dow Jones industrial average still hitting fresh highs. So argues Dawn Bennett, CEO of Bennett Group Financial Services, who has started beefing up her $700 million portfolio with stocks she thinks will ride out the volatility that may come from an economic downturn or even a geopolitical upheaval. Topping her "defensive" stocks: No. 1 brewer Anheuser-Busch (BUD ) and Atheros Communications (ATHR ), which makes semiconductors for wireless devices and infrastructure "systems-on-chips" for corporations. Both companies are cash-rich with little debt--and have firm grips on their markets, says Bennett. Atheros' sales rocketed from $1.8 million in 2001 to $183.5 million in 2005. They are expected to hit $300 million in 2006. Anton Wahlman of ThinkEquity Partners says a major stimulus for Atheros is the likelihood that a big chunk of the 1 billion cell phones sold annually will contain its chips. He rates Atheros, now at 20, a "buy," with a 12-month target of 29. For Anheuser, Bennett says global expansion is key for growth. It has a 50% share in the U.S. and 11.5% overseas. Anheuser is focusing on China, where it owns 27% of fast-selling Tsingtao beer. Bennett says the stock, now at 47, is worth 55. Even when the market turns bearish, which she believes is now happening, Anheuser and Atheros will thrive, she asserts.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

By Gene G. Marcial

    Before it's here, it's on the Bloomberg Terminal.