A Welcome Conundrum

 | Nov 01, 2012 | 6:10 AM EDT
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Do you pay up for what's up? I kept thinking about this all night, because I had four CEOs on Mad Money Wednesday night -- a new record -- and for each of these companies I had to soul-search as to what the right move would be.

Here's what I came up with. First there's Tanger Factory Outlet (SKT). This is the easy one. The stock barely rallied at all, and this company has been among the consistent real estate investment trusts out there. While there are others that I like more right now, including Ventas (VTR) -- whose CEO I interviewed the other night -- you will not go wrong owning this. It's the best run of the outlet malls, and the company has boosted its dividend every year since it has come public.

Business, as they say, is booming.

Then there's Annie's (BNNY). I know the rap: It's overvalued, and it can't make the numbers, not even in this latest quarter. But revenue was stronger than expected, and the company's biggest problem lies in stocking its stuff. I like this story very much, because I think that organic food -- even fattening organic snacks -- are the way of the future.

The toughest one is PVH (PVH). I can't recommend a stock that's gone up $19 in one day. That would be foolishness. A 21% move has occurred; it's too late. That said, when this one gets hit, and it will, you may have to circle back to it -- because its deal to buy Warnaco (WRC) is outrageously good. PVH shares rallied because the deal is accretive, but also because the company guided up, particularly for European results, where it is achieving double-digit sales growth. The betting was that this would be another VF Corp. (VFC), for which European sales fell off a cliff. Nope -- in PVH, the shorts were crushed.

Finally, there's Eaton (ETN). Here's one that works, and works right here, even with the shares up $2. The company missed the numbers. It guided down. But expectations are now at a low, and the transformative Cooper (CBE) takeout is about to close. That's huge, because it makes Eaton more immune from that miserable truck cycle, and it renders the company far more exposed to high-growing electrical equipment and controls. I admit Eaton has way too much exposure to Europe, courtesy of some ill-timed purchases that, while not disastrous, have made the stock unloved. However, this deal will make Europe less of a factor, too. Plus, the combined company is set to hit the ground running, because it has a soup-to-nuts package for the electric grid -- something you need when eight million people don't have any juice at home.

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