Jumping on JPMorganIn mid-2007, holding stock in financial outfits became taboo at Rutherford Investment Management, whose composite growth portfolio has snagged a five-star rating from Morningstar (MORN) for the past five years. But a year later, Rutherford hopped back into financials. It bought shares of JPMorgan Chase (JPM), the global banking giant with assets of $3.2 trillion and operations in more than 50 countries. JPMorgan now offers what a long-term growth investor like Rutherford requires for its portfolio: a cheap, "best in class" bank and a "fortress" company with huge potential, says the firm's president, William Rutherford. JPM's global franchise will help it "come out stronger" from the financial crisis, he adds. Like most other banks, JPM shares have been battered—falling to 14.96 on Mar. 6, down from a 52-week high of 50.63 last Oct. 3. Its strong investment banking unit helped it post better-than-forecast first- quarter profits, and it had climbed to 31.90 by Apr. 22.

As JPMorgan "continues to take market share in most of its businesses, we view it as one of the group's better performers," notes Jason Goldberg of Barclays Capital (BCS) (it has done banking for JPM). He rates the stock overweight, with a 12-month target of 42. Goldberg expects earnings of $1.75 a share in 2009 and $3 in 2010, vs. 2008's $1.40.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.Healthy Milk from Smart BalanceFat-free milk that tastes like whole milk, enhanced with Omega-3? That's what Smart Balance (SMBL) is counting on to boost sales—along with its "naturally trans-fat-free margarine" and other foods using a proprietary vegetable oil blend. Its milk was launched in Florida in 2007 and in the Northeast last year. Milk sales in Florida hit $4 million in 2008 and could reach $10 million-$12 million in 2009. Shares have risen to 6.82 from 4 in October.

Ken Gau of investment firm Waddell & Reed, which owns stock, says Smart Balance's growth will be driven by such new products. Rising sales "give us confidence the company is on track to achieve first-quarter growth in the range of 18%," says Jon Anderson of William Blair, which has done banking for Smart Balance. He sees profits of 30 cents a share on sales of $266 million in 2009 and forecasts 47 cents on $320 million in 2010.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.A Brave Face at Estée LauderThe recession has been ugly for high-end beauty products. So, in spite of the global reach of its products, Estée Lauder (EL) saw its shares dive to 19 on Mar. 9, down from 54 last September. Since then they have rebounded to 27.90, despite the continued consumer-spending slowdown.

That's partly because Estée Lauder's price-earnings ratio, which ranged from 15 to 33 over the past five years, tumbled to 10 with the stock's fall. This makes the shares seem cheap, considering the company's earnings growth of 12% annually over five years, says Steven Ralston of Zacks Investment Research. Although he expects earnings to drop in 2009, to $1.35 a share from 2008's $2.40, he rates the stock a buy, with a six-month target of 40. Daniello Natoli of EVA Dimensions, also bullish, says Estée Lauder will outperform its peers based on its earnings potential.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.