Cashing in on the New Frugality

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By Ben Steverman

Cashing in on the New Frugality

These are not good times for consumers, nor are they good times for consumer stocks.

The U.S. unemployment rate moved above 9% last month, while analysts expect consumer discretionary stocks' earnings to fall 29% this quarter, according to Thomson Reuters.

Even if the recession ends, indebted and out-of-work consumers will need to spend less and save more for the next several years, many economists say.

In such a tough environment, however, not all consumer stocks are doomed. BusinessWeek asked portfolio managers and analysts which consumer-focused stocks might find ways to exploit customer belt-tightening.

Click ahead for their recommendations.