Our Corporate Saviors

Looking though a list of some of America's largest companies to find firms which fit these descriptions, 24/7 Wall St. identified ten companies to watch for the signs of an economic recovery. A reasonable quarter or a slightly better-than-expected outlook from some of these companies should show that the recession is coming to a close.

Target is the substantially smaller competitor to Wal-Mart. While Wal-Mart had an increase in its same store numbers last month, Target's dropped 3.3%. The company still managed to have an extremely small increase in revenue to $4.14 billion. This chain remains an example for the better-run and stronger balance sheet retail operations in the US. It has more than 1,600 stores and 350,000 workers. Its revenue last year was $63 billion compared to Wal-Mart's $378 billion. Wal-Mart takes so much of the store traffic of customers with modest incomes that it will take an economic recovery for Target to begin to see even modest sales improvement. Better numbers here mean retail is starting a slow recovery to health.

Starbucks is a reasonable proxy that demonstrates the ability of the middle class to do very modest discretionary spending. The coffee store chain has cut out enough locations and employees so that it no longer saturates the markets where it does business. If it has done this correctly, Starbucks stores will not be competing with one another for the same customers. With a fancy cup of coffee priced at $3 and breakfast at $5 or $6, people do not have to be wealthy to come back to Starbucks, especially with its new value meals  But, they won't if they feel, as many people do now, that they are close to being poor. If Starbucks sends a signal that its business is a bit better, this will mean that middle income consumers are feeling hopeful .

CBS can still put shows on the air that attract more than 15 million viewers. It is hard for any medium other than broadcast television to be able to give marketers that kind of tonnage. In a recession, the fact CBS competes with Fox, ABC, NBC, and Univision means that the network is up against companies trying to take its market share and advertisers who are pressing for lower rates or have quit the TV advertising business completely. Unlike ABC or NBC, which are parts of companies in a number of other media businesses, CBS is a broadcasting "pure play." Wall St. doesn't like its lack of diversification and has pushed its shares down over 75% in the last year  Once CBS' advertising rates begin to recover, it will mean that marketers are prepared to spend to bring in new customers.

Ford still insists it will not need government funds to get through a restructuring and return to profitability. Its 42% drop in North American vehicle sales for January make people wonder if Ford can pull this off. Among The Big Three, Ford  has  the best balance sheet. Because it is has not taken money from TARP, it is also probably viewed as "safer" by consumers who may worry about whether their warranties will be honored. Vehicle sales in the US were well over 16 million two years ago. This year they could fall below 10 million. When Ford's forecasters say that they have seen a bottom it will be highly likely that the consumer is back in the car market. It may take years to get back to 2006 unit sales volumes, but with a much lower cost base Ford can be profitable with modest sales.

American Airlines has been buffeted between high fuel costs in the summer and low passenger traffic since the holidays when the recession diminished air travel. AMR traffic for January dropped 11.7%. Even with cuts in capacity, AMR has fewer passengers per plane. Most executives in the industry say the drop in travelers has not bottomed. AMR will almost certainly cut more routes and more flights to its hubs. The airline does not need to stop losing passengers to signal a recovery. If the rate of the drop-off begins to slow significantly, travelers are heading back to the skies.

Dell is viewed as the weakest of the US PC companies. Demand for computers has dropped as businesses and individuals keep PCs longer. Processors in machines bought two years ago are still good enough to perform most routine tasks. Dell is up against industry leader H-P, which has an advantage in selling its products though retail outlets. Dell also competes with Apple, which has a fiercely loyal customer base which has helped it gain market share over the last two years. Apple's sales are not a good indication of how IT spending is moving. Mac sales can defy gravity if the force is not too great. If Dell begins to see an increase in demand, people are back in the market for modest-priced PCs, which is the largest part of the market.