Colgate-Palmolive: One step ahead of the recession, one step ahead of the recovery

As a result, look for 10 percent earnings growth in FY2009 and FY2010. New product launches are adequate, and margins should widen as the U.S./global recoveries progress. Further, CL's footprint adds an element of revenue diversification: the company operates in more than 200 countries. The First Call FY2009/FY2010 EPS estimates for CL are $4.29 to $4.80.

Technically, Colgate-Palmolive's stock chart is strong – an uptrend, and a stock that rarely touches the key 50-day moving average. A golden cross – which is the 50-day MA crossing above the 200 day MA - and a gap-up at $64, are two, additional, positive technical indicators. Hence, it would not be a surprise to see CL above $95 by the end of 2010.

Finally, the Sell/Stop Loss has been raised to $59, or to just above cost, from $41. Hence, this is a zero-risk trade for your April-bought shares.

Stock Analysis: Colgate-Palmolive is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in CL now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your CL position before December 2009. Revised Sell/Stop Loss if you bought shares in this company: $59.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.