Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. And with the above in mind, Black & Decker is worth a review.

The Black & Decker Corporation (NYSE: BDK) is a global manufacturer and marketer of power tools and accessories, hardware, home improvement products, and fastening systems.

In general, analysts like BDK's recent restructuring to improve productivity and operating margins. For the most part, analysts are forecasting low-single-digit sales growth for 2008 and 2009, weighed down by the housing sector's doldrums.

Meanwhile, BDK's fastening/assembly unit business should somewhat offset housing's likely sub-par performance, and register improving mid-single-digit sales growth. The Reuters FY 2008/FY 2009 EPS consensus estimates for BDK are $5.43 to $5.86.

Further, the argument forwarded here is that BDK is not likely to remain at its cheap price (p/e 10) for much longer: it may not be the end of the housing slump, or even the beginning of the end, but, to quote the late British Prime Minister Winston Churchill, it may be the end of the beginning. If that's the case, getting ahead of the pack with BDK is prudent.

The risks? Analysts are keeping an eye on BDK's core component/raw material costs. A sustained U.S. economic downturn would also, obviously, hurt BDK's results. Given recent economic data points, a slowdown is a not a low-probability concern: still, with BDK's demonstrated business model, power tool position, and p/e of about 10, the risk/return here is very attractive.

The First Call mean rating for BDK is: Hold [10 firms]. Mean 2008 target: $76.00 [high: $92, low: $62].

Stock Analysis: Black & Decker is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from BDK's shares. Sell/Stop Loss if you were to purchase shares in this company: $48.

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.