Contrary to popular belief, it is not bad news that Wall Street hates. Professional analysts and investors are reasonably adept at processing bad news, applying whatever bloodletting a stock needs and then moving on to the next idea. It is uncertainty that gums up the works more than anything else, as it produces so many open avenues and so few definitive answers.

More than anything, it seems that it is the uncertainty about the economy that is weighing on stocks and stirring up volatility. A bad housing report here or a bad payroll number there and screens are flashing red for the entire day, only to rebound to green tomorrow when another piece of data reverses yesterday's bad mood.

With no clear trend to follow, here are a few ideas for investors looking to stay in the market but sidestep a little of the craziness.

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Abbott Labs
Abbott Labs
(NYSE:ABT) is a popular name, and with good reason. The company is diversified across drugs, diagnostics and devices, and management has been adept at delivering solid returns on invested capital. Healthcare has already taken its lumps, but Abbott looks poised to deliver years of high-single digit revenue growth, double-digit cash flow growth and solid returns for patient investors who can also collect a dividend along the way. (For more, see Spot Quality With ROIC)

Campbell Soup
Campbell Soup (NYSE:CPB) is not going to break any speed records with its growth trajectory. Nevertheless, this is a quite literal play on the "canned goods trade" - the idea that the economy could once again get very bad. Moreover, Campbell is sometimes under-appreciated for its very good returns on invested capital and its solid free cash flow margin. It may be passé to recommend food stocks in times of uncertainty, but Campbell looks like a company that can hold up well in darker times, but is priced to perform pretty well if good times should come instead. (For related reading, check out Kraft's Quarter Only OK.)

CA (NYSE:CA) is probably not going to be the first thought of many investors seeking a bit of calm during the storm. It is, after all, a software company and it relies upon generally healthy conditions for the IT market - a place where companies will often pull back and save money during troubled times. All that said, CA has a decent track record of maintaining revenue and profitability even in tough times, but a valuation that suggests investors think it will get left behind in better days. For investors looking to keep a foothold in tech, CA could be one of those low-downside/good-upside ideas that investors can hold into and through a recovery.

Teva Pharmaceutical Industries
Teva (Nasdaq:TEVA) has taken more than a few lumps lately, as investors fret over competitive worries and a broad slowdown in the healthcare market prompted by fewer patient visits to doctors. Still, this is an acknowledged leader in a field where scale really matters, and a company that should deliver double-digit revenue growth for some time to come. Trading near the bottom of its valuation range but with many lucrative generic targets coming off patent in the coming years, Teva has the benefits of a relatively safe business combined with some growth upside in the coming years. (For related reading, see Stocks On Drugs: What It Takes To Get High.)

The Bottom Line
Very few people are skillful enough at market timing to make it worth the risk. Consequently, investors worried about the volatility and lack of direction in the market may be better served by finding a few investment ideas that offer a little more safety than the average name, but that do not sacrifice much of the upside potential if the markets finally settle on a more optimistic view of the near term.

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Tickers in this Article: ABT, CPB, CA, TEVA

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