Protect yourself.

Dale Bryant offers defensive moves for shell-shocked investors

Many investors remain shell-shocked after recent market tumbles and losses (realized or unrealized) to their portfolios. Now is the time for investors to add some stability or defensive stocks to their positions. "Consider these stocks like an NBA team. Although offense is entertaining, defense wins the game," explains Dale Bryant, founder and portfolio manager of The Bryant Group, a financial services firm in New York.

Dale Bryant's defensive choices

                           P/E on
Company                   Projected   Est. 5-Yr.
Exchange:                   2001      Annual EPS      Why Stock Will
Symbol         Price(*)   Earnings      Growth          Outperform

Fannie Mae      $79.50      16.4%       14.1%      * House hunters are
NYSE: FNM                                          still shopping and
                                                   prices keep going
                                                   up.

Devon Energy     61.00       8.6        12.5       * Proven reserves
AMEX: DVN                                          have shown that
                                                   Devon gets gas out
                                                   of the ground, more
                                                   than their peers.

Astoria          57.53      12.1        12.0       * Less exposure to
  Financial                                        volatile markets.
Nasdaq: ASFC                                       Branch consolidation
                                                   should help increase
                                                   earnings.

Johnson &        99.41      26.8        13.1       * With new drugs for
  Johnson                                          aging Americans,
NYSE: JNJ                                          Johnson & Johnson
                                                   is poised for
                                                   growth.

Solectron        24.28      25.1        30.9       * Solectron should
NYSE: SLR                                          benefit from
                                                   rebounding tech
                                                   sector and trend
                                                   toward global
                                                   outsourcing.

(*) As of 5/16/01

Source: Dale Bryant, The Bryant Group, Zacks investment
Research, Etrade 2001.

Bryant adds that investors shouldn't expect the average 20% returns that they have grown accustomed to over the last five years. While they are not sure bets, Bryant's picks are safe bets.

Fannie Mae (NYSE: FNM
FNM Free National Movement (Bahamas)
FNM Foot and Mouth ). "Fannie Mae knows how to make money," insists Bryant. Because of its perceived government backing, it can sell bonds at attractive and much lower rates. Fannie Mae earns "the spread" between the sale price of the issued bonds, say, 6.5%, and the rate of the mortgages they have purchased from banks, at around 8.5%. That's usually 2%. With a P/E of 16.4, which is lower than the market P/E of 24, and the ability to increase revenues coupled with reliable earnings growth, this is a solid buy, he explains.

Devon Energy (AMEX: DVN). The energy company generates revenue from oil and gas exploration. The entire industry has had tremendous growth in the last year and this is still one of few sectors that is improving earnings. Within the last four years of operations, Devon's earnings per share increased fivefold. With a P/E of 8.6 and solid growth prospects it's a "buy." Moreover, last March, the Oklahoma City-based company increased its ownership in the oil fields in the Caspian Sea by buying more of a stake in Ramco Energy. Devon executives say the area is expected to become a major oil producer and a significant part of the company's international production base.

Astoria Financial Corp. (Nasdaq: ASFC). "If the rest of the year continues with snail-like growth, you'll want to look at companies that have less exposure to volatile markets," says Bryant. The Lake Success, New York-based bank is keeping things simple. Astoria Financial has been getting rid of unproductive branches, which Bryant expects will help increase profits.

Johnson & Johnson (NYSE: JNJ). This New Brunswick, New Jersey-based pharmaceutical company has broken new ground in the market, with its Alzheimer's disease drugs, which should increase sales moderately this year. The pharmaceutical arm markets products to healthcare professionals and the public. That class of drugs should keep the company afloat until new drug sales make an impact. Consumer household staples like Band-Aids and Mylanta should continue to do well.

Solectron Corp. (NYSE: SLR). The Milpitas, California-based firm is an electronic contract manufacturer for original equipment manufacturers. Solectron's top 10 clients represent 70% of sales. Those clients include Cisco (Nasdaq: CSCO), Ericsson (Nasdaq: ERICY), and Compaq (NYSE: CPQ). A recent acquisition of Centennial Technologies should help to strengthen Solectron's Technology Solutions Business Unit. In the second half of this year, when tech firms are expected to rebound, SLB will reap the benefits with additional orders. SLR reached a 52-week high of $52, but recent price targets are a respectable $35.