Last week’s answer

Founded in Arkansas in 1935, I’m the largest protein product producer on the planet, processing and marketing chicken, beef and pork. I boast 40 million chickens. I’m also America’s second-largest producer of corn and flour tortilla products. In 1968 I launched retail outlets called “Chicken Huts.” I bought Louis Kemp Seafood in 1992. I’m the leading marketer of meats to national fast-food chains and food-service distributors and a top provider of cooked meat toppings to the U.S. pizza industry and chicken products to supermarket delis and military commissaries. My annual sales top $24 billion. Who am I? (Answer: Tyson Foods)

Research resources

The online resources below can help you determine how healthy and promising a company is as a possible investment.

Note: If you don’t own a computer, make use of your local library, and perhaps check out “Fire Your Stock Analyst: Analyzing Stocks on Your Own” by Harry Domash (Financial Times Prentice Hall, $25) or ” One Up on Wall Street: How to Use What You Already Know to Make Money in the Market” by Peter Lynch (Fireside, $14). Many libraries also offer Internet access, permitting you to check out the Web sites below.

• The company’s own Web site. Look for links labeled “About Us,” “Corporate Information,” “Investor Relations,” etc., and try to read at least the most recent annual report. Search engines such as Google.com can help you find a company’s Web site. Look up company ticker symbols at http://finance.yahoo.com.
• Financial data and research providers, such as http://finance.yahoo.com and http://quote.Fool.com. All financial statements that companies must file with the Securities and Exchange Commission are available through sites such as Fool.com and Yahoo! and also at www.sec.gov/edgar.shtml.
• Analyst research reports. Your brokerage may provide you with these research reports for free. You also can read analysts’ thoughts on many firms via our newsletters at www.fool.com/shop/newsletters, and Morningstar’s at http://www.morningstar.com.
• Historical P/E ratios and other measures. Look these up at http://moneycentral.msn.com/investor/research/welcome.asp. This can be very handy. If a company you’re examining has a P/E of 20, for example, and you see that during the past five years its P/E usually has been around 30, then you might be looking at an attractive price right now.
• Insightful articles on firms that interest you in current issues and archives of financial periodicals. These include The Wall Street Journal, Investor’s Business Daily, Fortune, Forbes, BusinessWeek, SmartMoney, Barron’s, The New York Times’ business section, The Economist, etc. Check your local newspaper’s business section, too. Also useful are http://news.google.com, http://www.findarticles.com and http://www.highbeam.com.

General Electric’s diversity

General Electric (NYSE: GE) is much more than lightbulbs and NBC. It has 11 divisions, with eight producing double-digit earnings growth, and continued strong cash flow in its recent third quarter.

The company produced 15 percent overall revenue growth in the quarter, with NBC Universal, Healthcare and Transportation leading the charge, advancing 170 percent, 43 percent and 20 percent, respectively. The Olympics fueled NBC Universal’s growth, as the games attracted 203 million total U.S. viewers, or 86 percent of all television households. NBC benefited from 24-hour coverage spread across its affiliate networks.

GE also saw a 27 percent increase in orders during its third quarter and expects “strong momentum” for the fourth. Management remains confident that it can achieve earnings growth of 10 percent to 15 percent in 2005 as it launches new healthcare technology, expands consumer finance operations into Russia and Korea, and continues to produce low-emission and fuel-efficient locomotives.

GE usually paints a much rosier picture of the economy than most companies, which is probably due to the tremendous breadth of this conglomerate’s assets.

If you’re looking for shares that will stand strong in a difficult economic environment, then GE is worth serious consideration. This double-digit grower also sports a very attractive 2.36 percent dividend yield. The company has raised the dividend for 28 consecutive years.

The remnant rule

My husband and I use a “remnant rule” in investing. For example, in 1991 we bought 50 shares of stock in a well-known retailer with a solid history. During the next several years, the price foundered. My husband decided to sell in order to purchase another stock. I persuaded him to keep 10 shares. The second stock is currently selling for 10 times our purchase price, and the first stock rebounded well. Whether we sell a winner or loser, we always keep some for the long haul. — Laurel Hansen, Fort Wayne, Ind.

The Fool Responds: This is an interesting, and clearly sometimes profitable, approach. Here’s a contrary perspective, though: If you trade a lot, you’ll end up with a lot of remnants, probably too many to keep track of. Also, sometimes winners or losers should be sold completely, such as when they’re being hopelessly clobbered by competitors, you have no faith in them, or their stock has surged way beyond a reasonable level. Keep your rule in mind, but do consider selling completely sometimes.

Tax breaks for the military

Are there any special tax breaks for military personnel? — M.C., Winona, Minn.

There are. The first document that any member of the armed forces should read is IRS Publication 3, “Armed Forces’ Tax Guide,” which outlines issues that affect men and women in uniform. Some of the more beneficial provisions include:

• The exclusion from income of combat pay and some other allowances and payments. The death gratuity benefit of $12,000 also is not taxable.
• The deductibility of travel expenses for reservists.
• Tax forgiveness for those who die in active service in a combat zone or from an injury received in a combat zone.
• The extension of filing deadlines and payment of taxes for many military personnel.
• Special rules enabling military personnel to benefit from the home sale tax exclusion when they sell a home and realize a capital gain.

Other protections exist under the Soldiers’ and Sailors’ Civil Relief Act of 1940.

While many in the armed forces are aware of the tax issues relative to their service in the military, some are still not familiar with the protections provided by the Civil Relief Act, which offers, among other things, protection from eviction, delay of civil court actions, and reduced interest rates (6 percent maximum) on mortgage loans and credit card debt.