(MONEY Magazine) – A decade of happy days for consumer-products stocks went up in smoke in early April. That's when Philip Morris announced it would cut prices on its popular Marlboro cigarettes by close to 20% in some markets to fight discount brands. Although many analysts hailed the move as overdue, it nonetheless figures to slash the company's tobacco profits by as much as 40%. The result: Philip Morris stock dropped 7% in three days, pulling many other brand-name stocks down with it. Although premium-brand companies have been suffering from growing competition ever since the 1990-91 recession, the Philip Morris debacle soured investors on the entire group. Steven Leuthold, president of the Leuthold Group in Minneapolis, speaks for many analysts: ''We can't be optimistic about these heroes of the past decade. Their profit margins are unsustainably high.'' Yet a determined minority insists the worst is over. ''The demise of brands has been greatly exaggerated,'' says analyst Jean-Michel Valette at Hambrecht & Quist in San Francisco. ''The current consumer price resistance is typical of a post-recession environment,'' adds Peter J. Barry, director of research at Rothschild in New York City. ''And in the past, brand loyalty has been restored in a matter of months, not years.'' If you buy that contrarian argument, the reduced prices of a number of top- quality consumer securities should look attractive to you. The four below -- recommended by analysts who follow food, beverage and personal-products companies -- could return 20% to 30% over the next 18 months, according to the pros. They are discussed in order of risk, starting with the safest. % Anheuser-Busch (ticker symbol: BUD; recently traded on the New York Stock Exchange at $53 a share). Investors searching for brand-name bargains can start at giant Anheuser, the largest U.S. brewer, with estimated 1993 revenues of nearly $11.9 billion and more than 44% of the U.S. beer market. The stock, however, is as flat as a day-old beer, trading at a price/earnings ratio only 14.1 times analysts' estimates of 1993 earnings. Beverage producers were among the first to suffer from price-cutting competition in consumer products. ''Anheuser and PepsiCo were hit early,'' says analyst Roy Burry at Kidder Peabody in New York City. ''And the biggest fall the hardest.'' Beer accounts for nearly three-quarters of Anheuser's revenues, and 95% of the company's production is sold domestically. Its best-known brands: Budweiser and Michelob. Since sales of beer in the U.S. are growing less than 3% a year, Anheuser will be lucky to show annual earnings growth of more than 10% over the next five years. However, analyst David Goldman at Oppenheimer & Co. in New York City believes Anheuser is starting to revive by moving aggressively into foreign markets. The first step: In March the company announced that it was buying an 18% stake (with options to go up to 35%) in Grupo Modelo, Mexico's largest brewer with beer revenues of around $1.2 billion. Moreover, beer sales in that country are growing 6% to 7% a year. ''The dollars may be small now, but they could add one to two percentage points to Anheuser's earnings growth,'' says Goldman. If those prospects cut Anheuser's discount to the market in half, the stock, which yields 2.4%, could rise nearly 20% to the low $60s. Colgate-Palmolive (CL; NYSE, $56.75). ''Cigarette brands were vulnerable to discounters because smokers spend hundreds of dollars over the course of a year, but toothpaste costs only a few pennies a day,'' reasons household- products analyst William H. Steele at Dean Witter in San Francisco. ''To save a couple of pennies, are you really going to put something you're unsure of in your mouth?'' On such penny-wise logic, $7.8 billion Colgate has built a formidable array of brands -- including Colgate, Palmolive, Ajax and Mennen -- and has been able to make nickel-here, nickel-there price increases stick. ''Colgate has a dedicated program of expanding profit margins,'' says analyst Jack Salzman at Goldman Sachs in New York City. And Steele adds, ''Every product they launch has a higher gross margin than the one it replaces.'' ) A key part of the company's strategy consists of expanding overseas. ''Markets such as Latin America and Asia account for more than half of Colgate's earnings,'' notes Salzman. Not only is sales growth in those regions nearly twice that of the U.S. and Europe, but profits are higher -- operating margins were 13% last year for developing countries, compared with 9% for the U.S. and Europe. The analysts project that Colgate's earnings can grow at an average annual rate of 14% over the next five years. Steele thinks the stock, which trades at 16.9 times his estimate of 1993 earnings, could reach $72 a share in the next 18 months. Along with a 2.2% yield, that would mean a total return for investors of about 30%. Hershey Foods (HSY; NYSE, $51.50). Thanks to the firm's leading brands in both chocolate and pasta -- including San Giorgio and Ronzoni -- $3.5 billion Hershey has been showing big-as-meatball earnings gains. ''There's almost no competition from private labels in chocolate, and the brand-name guys control pasta,'' says analyst Terry Bivens at Argus Research in New York City. About 75% of the 99-year-old company's sales come from confectionary, where Hershey has a 22% share of a $10 billion market. Moreover, Hershey has been steadily increasing that share, largely by creating new products. For example, the company is about to launch Hugs, a kissing cousin of Hershey Kisses, with a dark chocolate center coated with white chocolate. ''Now they're going to be able to advertise Hugs and Kisses,'' says Ronald B. Morrow, food analyst at Smith Barney in New York City. Much of the rest of Hershey's revenues are from dry pasta. In the first quarter, Hershey nosed out Borden as the pasta leader, with 27.7% of the market vs. Borden's 27.6%. ''I expect Hershey to widen its lead this year,'' says Bivens. Overall, growth in sales volume is running 4% to 6% -- ''double the growth for many other food companies,'' notes Morrow. The company's weakness is that it has failed to expand significantly outside North America, which still accounts for more than 90% of total revenues. Hershey did attempt to acquire Norwegian candymaker Freia Marabou last year, amassing an 18.6% stake in the company, but was outbid by Philip Morris; it collected a bittersweet capital gain of $40 million in the process, though. The analysts project that Hershey's earnings can continue to grow 12% to 14% annually over the next three to five years. Therefore, Morrow thinks the stock could rise to the low to mid-$60s within 18 months. Combined with a 2.1% yield, that would give investors a total return of at least 20%. Ben & Jerry's Homemade (symbol: BJICA; over the counter, $28.50). With flavors such as Chunky Monkey and Wavy Gravy, this $160 million Vermont ice cream maker is merchandizing '60s feel-good nostalgia by the scoopful. ''Consumers will pay a premium for an excellent product, and Ben & Jerry's certainly has that,'' says Ronald Morrow. ''But they also get a lot of mileage out of being Ben & Jerry's.'' That includes quirky personality and more- relevant-than-ever '60s values such as environmentalism, explains Jean- Michel Valette at Hambrecht & Quist. The company's tie-dyed style comes with buttoned-down business sense. Since overall ice cream sales are flat, Ben & Jerry's has positioned itself in the superpremium end, where sales are growing 5% or more annually and prices are steep. ''You could buy nearly a gallon of regular ice cream for the $2.59 you pay for a pint of Ben & Jerry's,'' says Morrow. To up its 40% share of the superpremium market, the company is broadening its distribution. ''They have good penetration of large grocery chains,'' says analyst Matthew Patsky, who covers socially responsible growth companies at C.J. Lawrence in New York City. ''Now they're expanding into more mom-and-pop- style stores.'' Overall, the analysts project that Ben & Jerry's can raise its revenues at least 15% annually over the next five years and boost profits even faster. One reason: The company is building a facility to assume the 36% of its ice cream production now done by outside firms. The analysts expect earnings to rise 25% to $1.50 a share next year and consider the stock attractive, even though it pays no dividend and trades at a P/E of 22.8 times this year's earnings. As a high-P/E growth company, Ben & Jerry's is most suitable for aggressive investors who recall the go-go years with fondness.

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Colgate's sales growth in developing countries is nearly twice that in the U.S. and Europe -- and profits are higher too.

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