"Shares of Walgreen (NYSE: WAG) have come under pressure in recent months, reflecting a slowdown in sales because of a weakening economy and intensifying competition," notes Richard Moroney.

The editor of Dow Theory Forecasts adds, "However, Walgreen's long-term prospects remain appealing, and the stock is attractively valued. Walgreen is a Long-Term Buy." Here is his review.

"Big, strong, and healthy, Walgreen is the largest U.S. drugstore chain as measured by revenue and the second-largest based on store count.

"The company operates more than 6,200 stores in 48 states and Puerto Rico and plans to boost the count to 7,000 by fiscal 2010 ending August. Walgreen sees long-term potential for about 13,000 U.S. stores. Prescriptions generate about 65% of total sales, with the rest coming from general merchandise.

"In fiscal 2007, both pharmacy and general merchandise sales growth outpaced the industry average, and Walgreen increased market share in nearly all of its core categories.

"Give muni bonds a good look." says Richard Moroney in Dow Theory Forecast, a leading "blue chip" newsletter that has been publishing for over five decades, who offers a trio of Vanguard funds for investors seeking safety and income.

The advisor explains, "Municipal bonds are showing signs of life, presenting investors with an intriguing opportunity." Here, he review the situation and offers some favorite investment vehicles.

"Muni bonds usually yield less than Treasurys because interest payments from municipals are exempt from federal income taxes.

"But in today's topsy turvy market, intermediate-term municipal bonds now yield around 3.7%, versus 3.6% for 10-year Treasurys. A tax-free yield of 3.7% is the equivalent of a taxable yield of 5.5%, assuming a 33% federal tax bracket.

"Uncertainties about the economy and credit concerns have weighed on bonds, lowering prices and raising yields. Hedge funds have also dumped muni bonds in an attempt to cover trading strategies gone sour.

Following a disappointing auction, Sotheby's (NYSE: BID) lost over a third of its value in trading last week. Despite the downfall, Richard Moroney sees an opportunity to "bid" on the shares of the art auction firm.

The editor of Dow Theory Forecasts explains, "Sotheby's plunged in price after disappointing results for a major art auction triggered several brokerage downgrades. Following the drop, the company posted better-than-expected sales for the September quarter.

"However, because of losses on guarantees that Sotheby's provided to sellers in the disappointing auction, earnings were slightly worse than consensus estimates. For the quarter, the company lost $0.33 per share, an improvement from the per-share loss of $0.49 in the year-earlier period.

"Because of the seasonal nature of the art business, Sotheby's typically loses money in the September quarter. The company says it remains optimistic on the outlook for the art market for the remainder of 2007, and it seems Wall Street has overreacted to a single disappointing auction.

"While worries regarding the guarantees that Sotheby's provides and the general health of the art market could keep the stock under pressure in the near term, we view the sell-off as a buying opportunity.

"Trading at 12 times expected 2007 earnings, the stock seems undervalued considering the company's track record and outlook. Sotheby's remains a Best Buy."

Each day, Steven Halpern's TheStockAdvisors.com website features the latest investment commentary and favorite stock picks of the nation's leading financial newsletter advisors.

"In volatile times, keep it simple," instructs Richard Moroney. "For us, simple is stocks with strong fundamentals and solid growth prospects that trade at attractive valuations."

In his Dow Theory Forecasts, the advisor profiles IBM (NYSE: IBM) and PepsiCo (NYSE: PEP), each of which is involved in large share buybacks.

Moroney explains, "IBM competes in mature industries but continues to drive double-digit profit growth, developing software products and targeting fast-growing niches in the services business." In addition, he adds, IBM is expanding in such emerging markets as Brazil, China, India, and Russia.

Moroney states, "Reflecting the strength of its software and services businesses, IBM recorded 16% growth in per-share earnings for the first nine months of 2007. Services contract signings, a key indicator of IBM's future growth, jumped to $11.8 billion in the September quarter, up 12% from year-ago levels.

"Cost-cutting efforts have boosted profitability in recent quarters, a trend likely to continue. Share repurchases are also boosting results. IBM completed a $12.5 billion accelerated share-repurchase agreement in May, reducing the share count by 8%.

Chevron (NYSE: CVX) is a buy based on the proprietary screening model used by Dow Theory Forecasts; the stock scores a 96 (out of 100), based on top ratings for quality and performance.

Editor Richard Moroney notes, "measured by proved reserves, Chevron is the fourth-largest oil company in the world. Refining and marketing assets include 20 refineries and about 20,500 retail sites in nearly 90 countries."

He explains, "High oil and gas prices and strong refining margins continue to drive Chevron's results. The company is working to improve its portfolio of production assets through acquisitions and international exploration, which should boost reserve replacement and production capacity."

With production slowing at its mature North American and North Sea assets, he points out that Chevron has been working to expand its portfolio in promising growth areas. (For example, in 2005, he observes, Chevron purchased Unocal for nearly $17.3 billion.)

"Many U.S. companies are getting a lift from strong overseas business, and McDonald's (NYSE: MCD) is no exception," says Richard Moroney, noting that overeas same-store sales are growing at roughly twice the rate seen at U.S. outlets.

"That's not to say that the firm's domestic business is stale," he adds in Dow Theory Forecasts. Indeed, he notes that the company has reported 51 consecutive months of same-store-sales growth and has been beefing up its U.S. stores with new menu items and longer operating hours.

Moroney explains, "McDonald's should continue to benefit from the ongoing rollout of new menu items, including premium salads, snack wraps, and breakfast items." The company, he notes, has been extending operating hours at some restaurants and said it wants all of its U.S. restaurants to open by 5 a.m. by 2009 to capture more of the growing fast food breakfast market.

Another key to McDonald's success, he contends, has been its willingness to shed operations and outlets that are underperforming or diverting resources from core operations. To that end, the firm sold its remaining interest in Chipotle Mexican Grill (NYSE: CMG)and agreed to sell its Boston Market chain.

"New leadership often emerging during corrections," says Richard Moroney in Dow Theory Forecasts, who highlights 6 relative strength blue chips.

The advisor explains, "Stocks have retreated sharply and broadly, reflecting concerns that turmoil in the corporate-junk-bond and mortgage-debt markets will spill over to the broader economy – and perhaps halt the boom in takeovers."

Near-term volatility seems likely, he suggests, and a pullback to 12,700 to 13,350 on the Dow Industrials would be consistent with a secondary correction in an ongoing bull market. While holding some cash on the sidelines seems prudent, he advises, his recommended cash position remains at 5% to 10%.

Looking to find the stocks that will qualify as "new leadership" for after this correction, he notes, "A stock's ability to outperform during such pullbacks is a bullish indicator."

"Public companies share the wealth with investors mainly through dividends and stock buybacks, and both actions have historically benefited investor returns," explains Richard Moroney in Dow Theory Forecasts, a blue-chip-focused service that has been published for over 50 years.

To benefit from both types of yields, the advisor has combined both dividends and buybacks to create what he calls a "shareholder yield." He explains, "Since both types of yield signify added value to shareholders, investors should be able to improve their odds in the market by harnessing the power of both statistics."

Moroney suggests, "In this case, dividend yield equals cash dividends over the prior 12 months as a percentage of a company's current market value, while the buyback yield equals cash spent on buybacks as a percentage of market value." The shareholder's yield is then the dividend yield and the buyback yield added together.

Moroney then screened for blue chip stocks with high shareholder yields, highlighting four that stood out in his search: Citigroup (NYSE: C), Exxon-Mobil (NYSE: XOM), McDonald's (NYSE: MCD) and Microsoft (NASDAQ: MSFT).

When looking for growth, Richard Moroney, editor of Dow Theory Forecast, notes that he avoids speculative and expensive "hypergrowth" stories and prefers to focus on steady growers with reasonable valuations and the ability to exceed expectations."

Among his current favorite growth ideas is Nike Inc. (NYSE:NKE). He explains, "The company hopes to increase its annual sales to $23 billion by fiscal 2011 ending May, up from $15 billion in fiscal 2006, as part of a five-year growth strategy announced in February."

He notes that the firm's plans include expanding its retail presence with the addition of 100 new company stores worldwide over the next three years, half in the U.S.

In addition, the company is expected to divide the Nike brand into six categories -- soccer, basketball, running, men's training, women's fitness, and sports culture -- to better target consumers. Moroney says, "Management expects to reach its sales growth target without the help of new acquisitions."

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Lockheed Martin (NYSE: LMT), the world's largest military weapons manufacturer, is the favorite conservative stock of Rich Moroney, editor of Dow Theory Forecasts. The advisor notes,"Lockheed generates about 80% of sales to the U.S. government. Lockheed is the prime contractor for the F-35 Joint Strike Fighter, a large and well-funded defense program -- and one of the company's most significant development projects.

"Lockheed has been working to diversify its defense and intelligence work, as well as non-defense government work. Its information-systems and technology-services businesses have been growing nicely, as the government is increasingly outsourcing.

"In August, Lockheed was chosen as the prime contractor for NASA's successor to the space shuttle -- an award with an initial contract value of $4.2 billion.

"At 16 times estimated year-ahead earnings of $5.55 per share, the stock trades at a discount to its five-year average forward P/E of 17 and its peer-group average of 21. Lockheed is a Focus List Buy and a Long-Term Buy."

To see Rich's favorite speculative idea for 2007, click here.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Philadelphia Consolidated Hldg (NASDAQ: PHLY) is the top speculative idea from Rich Moroney, editor of the small-cap oriented service, Upside.

The advisor says, "PHLY markets and underwrites property-and-casualty insurance, focusing on underserved markets. Product launches and service enhancements should help sustain premium growth and decent pricing.

"The company boasts a long history of selective and highly disciplined underwriting. The company consistently has one of the lowest loss ratios in the industry -- along with exceptionally high renewal rates. At 26%, the company's return on equity is well above the 15% of the average property and casualty insurer.

"September-quarter earnings per share surged 172% to $1.28, exceeding the consensus estimate by $0.55. Sales increased 19%. Total net earned premiums climbed 21%. Results benefited from the release of reserves due to favorable prior years' claims experience.