With the markets still in a choppy/consolidation mode (or perhaps worse), it's best to consider including a few defensive stocks in your portfolio. With the aforementioned in mind, Hormel Foods is worth an evaluation.

Hormel Foods (NYSE: HRL) is a diversified producer of consumer foods. A processor of the now universally known "spiced ham" product -- SPAM -- Hormel is also a top U.S. turkey processor and a major pork processor, including the Jennie-O turkey, Cure 81 hams and Always Tender fresh pork brands.

In general, analysts expect 5-7% revenue growth for Hormel for FY2008, with an adequate performance from its grocery division, with pricing power offsetting lower volumes.

Meanwhile, refrigerated foods should outperform expectations in FY2008, with widening margins; specialty foods demand probably will be flat.

Feed costs remain a concern, but Hormel's product diversification, and increased sales as a percentage of business from higher-margin, value added products, position the company about as well as any consumer food producer for the U.S. economic slowdown. The Reuters F2008/F2009 EPS consensus estimates for HRL are $2.38/$2.59.

The risks? Slowing U.S. demand combined with additional feed / ingredient costs would hurt Hormel's results. Analysts are also keeping an eye on HRL's marketing expenses.

The First Call mean rating for HRL is: Buy [11 firms]. Mean 2008 target: $43 [high: $48, low: $36].

Stock Analysis: Hormel Foods is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from HRL's shares. Sell / Stop Loss if you were to purchase shares in this company: $27.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.