Some stocks the pros like for weathering a market lag

It must be confusing to someone who just bought his first stocks to hear that a reversal in a seven-month-long upward surge in the market is called a ''correction.''

But that's what professional investors and analysts call it, and if the recent performance of the Dow Jones industrial average is any indication, a correction - at least a mild one - has begun. After dropping 23.22 points the week before, the market turned in a lackluster performance last week before closing at 1,117.74, unchanged for the week.

Assuming a correction has arrived, these investors and analysts have a variety of opinions about overall industries and specific stocks that would seem to have the best chances of turning in good performances in spite of it. The stocks mentioned most often are in telecommunications and defense-related industries.

The breakup of the American Telephone & Telegraph Company and the coincidental emergence of independent telecommunications companies present several opportunities for strong stock selections, Fred Fraenkel, chief investment strategist at Prudential-Bache Securities, says. These companies have the added benefit of paying respectable dividends at a time when other stocks in an investor's portfolio may be doing poorly, he notes.

Three of Mr. Fraenkel's selections in this group are Allied Telephone, Lincoln Telephone & Communications, and International Telephone & Telegraph. ''These companies are competing in a fairly good market for telecommunications services,'' he said.

President Reagan's desire to beef up the US defense establishment will help another advanced-technology area, says Eugene E. Peroni Jr., vice-president and director of technical research at Wedbush, Noble, Cooke Inc., a Los Angeles brokerage. This is what he calls ''high-tech specialty companies,'' those whose products include communications and radar equipment purchased by the Pentagon.

Included on Mr. Peroni's list are Analog Devices Inc., Applied Me'netics Corporation, Rockwell International, Lockheed Corporation, and Hewlett-Packard Company. He then adds IBM, describing it as ''real solid, good for the more conservative investor.''

Several of the analysts said they are shying away from other, strictly high-tech or computer stocks for now, at least until the market regains its earlier strength.

Mr. Peroni also believes airline and air shipment stocks should be strong, thanks to lower oil prices. This group includes American Airlines, Northwest, Federal Express, and Airborne Freight.

''Defense stocks should do well, given the nature of the world, the unstable politics in some countries, and a relatively hawkish (US) President,'' agrees Herbert Kleiman, an analyst at Prescott, Ball & Turben, a Cleveland brokerage.

One company Mr. Kleiman favors in this climate is Loral, which makes radar warning receivers for the F-15 jet fighter. Two others he expects to benefit from the growth of electronic warfare equipment are Electrospan and E-Systems.

''In spite of Congress,'' adds Andrew Cox, vice-president and chief investment manager of the Founders Fund, a Denver mutual fund, ''defense looks like a good bet for the next five or six years.''

If the declining recession leads to a steady rise in spending by consumers, another group of stocks should improve, says Mr. Peroni at Wedbush. These are the retailers, including J. C. Penney, Sears, Roebuck & Co., and Macy's.

The stocks were badly ''beat up'' by the recession, agrees Peter Anderson, senior portfolio manager at IDS Advisory, the tax-free investment arm of Investors Diversified Services Inc., a Minneapolis mutual fund. Thus he sees these stocks, including food and beverage companies, doing better as people start spending again.

Mr. Anderson expects a related group, known as the ''consumer cyclicals,'' to show improvement, too. This category includes companies like General Electric, 3 M, and Corning Glass.

The growth of the service industry should benefit several stocks, notes Paul Rothman, an analyst at Advest Inc., a Hartford, Conn.-based brokerage. Companies that service the high-tech sector should do particularly well, he said. This would include firms that provide computer services to banks, brokerages, insurance companies, and government agencies. Many of these are smaller ''mom and pop'' operations, traded over-the-counter or on regional markets, Mr. Rothman added.

Just as these professional investors have their own ideas about stocks that seem most ''correction-proof,'' they also have their own opinions about how high the Dow will go this year, although they seem to agree the current correction will be fairly mild and short-lived.

After a few minutes of calculations, Mr. Fraenkel at Prudential-Bache said: ''We expect the Dow to reach the high 1200s or even the low 1300s by the end of the year. The second half of the year could get pretty exciting.''

Mr. Peroni thinks the Dow will go over 1200 in the next two or three months, ''though I don't think we're going to see anything too much over that for a while.''

Mr. Anderson is more optimistic. ''After making about a 75-point correction, I think a 1400 Dow is certainly a possibility. I like that number.''

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