"Sanofi-Aventis (SNY), a pharmaceutical products company, is a buy based on our 'Benjamin Graham value' model," says John Reese who assesses stocks based on the investment criteria of numerous "legendary" investors.

The editor of Validea, explains, "Indeed, the stock earns a 100% score, meeting all of the investment criteria we review in for this value-oriented screen.

"Benjamin Graham has been recognized for decades as the father of value investing; Warren Buffett was a student of Ben Graham at Columbia University and later worked for Mr. Graham for several years," notes J. Royden Ward.

The editor of the Cabot Benjamin Graham Value Letter explains, "We've combined Warren Buffett's and Ben Graham's investing criteria for choosing stocks and and found six high-quality companies.

"We believe that the six stocks that passed our screen each sell at sensible prices, offer reasonable appreciation potential, and provide solid dividends.

"We screened the Investors Business Daily (IBD) and Zacks databases to find companies whose earnings are accelerating and whose earnings estimates are being increased by analysts," says J. Royden Ward.

The editor of the Cabot Benjamin Graham Value Letter continues, "All of the stocks in our list have IBD Composite Ratings of 95 (99 is best) and Zacks Ratings of 1 or 2 (1 is best). These recommendations offer excellent appreciation potential with moderate risk.

"Ensco PLC (ESV), a London-based firm which provides offshore drilling services, operates eight ultra-deepwater semi-submersible rigs, as well as 40 premium jackup rigs," notes John Reese.

The editor of Validea explains, "The stock, which has a $7.7 billion market cap, gets strong interest from the models I base on the writings of value investor Benjamin Graham. Indeed, the stock earns a 100% rating under my Ben Graham model.

Last year, Archer Daniels Midland (ADM) was included in my stock picks for 2010 and it lost 4.9%. I gave some consideration to keeping it in the mix this year but thought more highly of other stocks in 2011, so I cast it off.

The turning of a calendar page is arbitrary and investments have only modest correlation to it in most instances. However, two weeks into the year ADM is already up, closing Wednesday at $32.56.

Corn prices have been rising and when last I checked futures were up another 1.47% in early morning trading.

I have already gone on record this year saying that financial companies and insurance stocks are going to continue to rebound. In my previous two posts Chasing Value: 2011 Stock Picks -- 5 of 11 and Chasing Value: 2011 Stock Picks -- 6, 7, 8, 9, I included several financial institutions. Today I add an insurance company.

The industry got whacked hard for many reasons. For one, it makes a significant amount of profit by investing its float, and like every other investor, the industry lost a pile of money in the financial crisis. It was embroiled more directly than some industries, as several insurers are affiliated with banks. Finally the housing crisis meant disruption to payment streams by homeowners who were delinquent on more than their mortgages.

The list of stocks has been whittled down to four. Chevron Corporation (CVX) made the cut to become the oil company stock. Three defense sector powerhouses are competing for one spot in Chasing Value: 2011 Stock Picks -- The Journey Begin.

Today we take a more comprehensive view returning to earlier metrics, and adding some other criteria in order to reach a conclusion. This series began with the contention that making specific predictions was a fools errand with the danger to your portfolio coming from "black swans". To try and add some general counter measures to this possibility I decided that the defense and oil sectors might provide protection against the greatest of threats, war and terrorism. On that basis I posted Chasing Value: You Must Own Defense and Oil for Safety.

"Despite more than doubling since we first recommended it just shy of two years ago, Sprott Resources (SCP), a Toronto-listed resource company, remains a strong buy, selling at a discount to a reasonable asset value," says Adrian Day.

The money manager and editor of The Global Analyst explains, "Sprott makes direct and indirect investments in the resource sector, frequently with new businesses which it subsequently takes public after nurturing them.

"One such is Orion Oil & Gas, of which Sprott still owns 78%, and remains undervalued. After more possible acquisitions, Orion could increase in value and more shares be spun off.

"Quality companies with low price-to-book value ratios (P/BV) have outperformed companies with higher valuations for the past three-, five- and 10-year periods," says J. Royden Ward.

The editor of the Cabot Benjamin Graham Value Letter explains, "Our search for undervalued companies to with price to book value ratios found three stocks in tech-related sectors: Kyocera (KYO), PC Connection (PCCC), and Thermo Fisher Scientific (TMO).

"To find the best stocks with low price-to-book value ratios, we required Value Line Financial Strength ratings of A or better, dividend payments increasing over time, low P/E ratios and good earnings prospects for the next 12-month and five-year periods.

"It's been tough going for Lockheed Martin (LMT) in 2009-10, as well as for defense stocks overall," notes Stephen Leeb.

The editor of Leeb's Income Performance Letter explains, "Investors are concerned about the impact cutbacks in defense spending will have on profits. Still, the company arguably is the best positioned of the major defense contractors to weather a smaller defense budget.

"The company is bracing for leaner times and has taken cost-savings measures, such as offering early retirement incentives to executives. And its share price appears to have more than discounted any cuts that may come down the pike.

"Research In Motion (RIMM) is clearly undervalued at 9.7 times forward EPS; investor's concerns regarding the intense competition in the smart phone market have caused the stock price to decline 26% during the past seven months," says value investor J. Royden Ward.

The editor of Cabot Benjamin Graham Value Letter explains, "We believe exciting new product introductions will boost sales and earnings growth more than expected during the next couple of years.

"Procter & Gamble (PG), a long-time growth stock, is now in value territory based on its above-average dividend yield," says Marvin Appel.

The editor of Systems & Forecasts explains, "The stock is -- which has become a high dividend payer -- is recommended as a long-term holding in a conservative equity portfolio.

"Procter & Gamble, historically an expensive stock in terms of its dividend yield, has developed into a high dividend payer by the standards of the U.S. market.

"Among our latest buy recommendations -- based on the value investing strategy of Ben Graham -- we like Gilead Sciences (GILD) and Teva Pharmaceutical (TEVA)," says J. Royden Ward.

The editor of Cabot Benjamin Graham Value Letter explains, "Gilead is a biopharmaceutical company that discovers, develops and markets therapeutic treatments to combat viral, bacterial and fungal infections. Its shares undervalued at 9.7 times forward 12-month EPS.

"Teva, based in Israel, develops, makes and sells generic and proprietary-branded (store brand) drugs. Its shares are clearly undervalued at 10.6 times forward EPS. We consider both stocks to be very low risk.

Yesterday I began a review of the five major U.S. defense contractors, searching for potential stock value. The group included General Dynamics (GD), Lockheed Martin (LMT), Boeing (BA), Northrop, Grumman (NOC) and Raytheon (RTN). After examining the P/E, PEG, P/CF, P/S, and P/B, Boeing did not make it through the screens.

Today I continue the exercise, hoping to find a stock worthy of placing a bet.

Dividend Yield

• Lockheed Martin: 3.77%
• Raytheon Company: 3.16%
• Northrop, Grumman: 2.89%
• General Dynamics: 2.59%

The defense sector is down, but don't count it out. We give lip service to the likelihood of defense being a target of budget hawks in Congress, but truth be told, the same fiscally conservative members are often the biggest supporters of defense.

Equally important is that unlike many other industries, this is one tech sector that keeps most of its jobs at home and well-distributed through the country. This, too, preserves defense spending.

The major players in the industry after 20 years of consolidation are General Dynamics Corp (GD), Lockheed Martin (LMT), Boeing Co (BA), Northrop, Grumman (NOC), and Raytheon Company (RTN). In addition there are hundreds more making specialized parts in support of the majors and more still supplying basic elements like tires, wiring, computer processors, steel, aluminum, specialty glass, and ammunition. Then there are suppliers of manpower and smaller manufacturers producing unmanned aircraft drones and robots.