(MONEY Magazine) – Stock investors' best offense next year starts with a good defense. That's why our five picks for 1994 are all strong businesses that have temporarily fallen out of investors' good graces. Such stocks wouldn't drop much further even if the market were to cave in. But when the outlook brightens, our three domestic and two foreign choices figure to ride the coming year's most powerful economic trends. (Both the foreign stocks trade in the U.S. as American Depositary Receipts, or ADRs.) -- Alcan Aluminium (AL, New York Stock Exchange, lately $20). Recently trading around book value, $7.4 billion Alcan's depressed shares reflect a merciless three-year, 61% slump in aluminum prices. However, Michael Metz, chief investment strategist for Oppenheimer & Co., believes that political turmoil in Russia next year could stifle the country's aluminum exports, which currently provide about 9% of the world's consumption. "As aluminum prices strengthen, I expect Alcan to take off," says Paul Ehrlichman, a managing director at Brandywine Asset Management. The company has cut costs ferociously, saving $750 million last year alone. Moreover, its 164 plants worldwide include 38 that are close to Pacific Rim export manufacturers, whose demand for aluminum could soar as recessions end in Europe and Japan. Ehrlichman figures that Alcan, which will lose about 45 cents a share this year, can achieve profits of as much as 50 cents in 1994. He expects the stock to hit $35 in 18 to 24 months for a 75% gain. -- Black & Decker (BDK, NYSE, $20.50). Recession, new-product start-up costs and $2.8 billion of debt have smothered earnings at this $4.8 billion manufacturer of appliances, hardware and power tools. But analyst Michael Mead of brokerage Legg Mason Wood Walker points out that the company's recent restructuring of $1.8 billion in long-term debt has eliminated its escalating quarterly principal payments and cut its interest costs by roughy $50 million over the next five years. The catalyst for stellar gains in 1994, however, will be recovery in Europe. The brand name is so strong on the Continent that Germans refer to home improvement as "Black & Deckering." Mead figures that earnings will more than double over the next two years and that the share price could hit $26 within 18 months, a 30% gain. -- Geneva Steel (GNV, NYSE, $16). Located in Provo, Utah, $465 million Geneva ; Steel enjoys labor costs 40% below the average for domestic steelmakers. Yet because the steel industry is still depressed, the stock trades at 1.7 times book value, about half the level of the average stock in the S&P 500. Merrill Lynch analyst Jordan Estra believes that as the U.S. economy gathers speed next year, steel demand will grow 8.5%. "This is a company at the cusp of a dramatic change," he says. He predicts that Geneva will vault from an 80 cents-a-share loss in 1993 to a whopping $4 profit in 1995, causing the stock price to more than double in 18 to 24 months. -- Nestle (ADRs trade over the counter, $39.75). Investors have been dumping brand-name consumer stocks since spring, including Swiss-based Nestle. Today its shares trade at only 12.6 times estimated 1994 earnings, about 37% cheaper than the average U.S. food stock -- even though Nestle draws 64% of its $36 billion in revenues from outside the U.S., where consumers are more loyal. Moreover, Frank Castle, senior portfolio manager at the New York City money management firm Feeley & Wilcox, is impressed by Nestle's $1.05 billion a year in free cash flow (basically operating income before depreciation but net of capital spending). "That gives Nestle real buying power," says Castle, who expects the Swiss giant either to acquire another major brand-name company or to raise its 80 cents dividend about 8%. He thinks the share price could top $50 in 18 to 24 months, a 26% gain. -- Sony (SNE, NYSE, $44.75). Investors abandoned this $37 billion consumer electronics leader four years ago during their wholesale flight from hardware companies to software firms. However, Anthony Cragg, portfolio manager of the mutual fund Strong International Stock, points out that Sony is also a software powerhouse. It owns $10 billion in entertainment assets -- equal to 64% of the parent firm -- including Sony Music (formerly CBS Records) and Sony Pictures (formerly Columbia Pictures). Even so, the stock trades at only 1.25 times book value, about 40% less than the typical Japanese entertainment company. Cragg is looking to new products to revitalize Sony's profits, including a CD-ROM system that runs video games. He expects Sony's shares to zoom 43% to $64 within two years.

CHART: NOT AVAILABLE CREDIT: Sources: Value Line Investment Survey and Crown Point Publishing CAPTION: The stocks to reckon with in 1994 None of the stocks below will be winning any beauty contests this year. Alcan and Geneva Steel, in fact, will actually post losses. But all five are poised for robust growth as the global recession fades.