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What we're looking for

Resilient stocks in the event of another downturn.

It's a great time to be an investor, isn't it?

The markets are on fire, at least in the United States. Both the Dow Jones industrial average and the S&P 500 index reached record highs this week. Corporate profits are on the rise, and both oil and natural gas prices look set for gains. The bulls are clearly running the show.

However, there are some alarming aspects to this party. First of all, the current rally is mainly a creation of the U.S. Federal Reserve's policy of quantitative easing. It's also moving on thin volumes and low volatility – conditions historically linked to sudden market drops. And it's not at all reflective of the U.S. economy, which is still struggling to avoid another recession.

On top of this, fresh questions are being raised about the stability of the euro zone in the wake of Cyprus's banking crisis, and the possible collapse of China's housing bubbles (yes, there are more than one), which could cast a chill over the global recovery.

How we did it

We looked for North American stocks that might weather a sudden downturn better than most, using the following criteria:

-Market cap of at least $200-million;

-Positive trailing 12 months basic earnings per share;

-Five-year average return on equity greater than 10;

-Current price-to-tangible-book-value per share of less than one.

The tangible book value of a company is an indication of what would be left if a company were forced to sell all its assets at book value and pay off all its liabilities. The calculation excludes intangible assets, such as patents, trademarks and goodwill, since these might not be able to be sold. The lower the price-to-tangible-book-value ratio, the more confident shareholders can be that they will be able to recover a portion of their investment in the event of bankruptcy.

What we found

Insurance and resource stocks stand out in this list, followed by financial and consumer companies. Looking at their technical charts on, it's clear that some of these firms felt the full wrath of the 2008 crisis, notably AIG. However, companies such as Indigo Books & Music and Corning Inc. rode it out virtually unscathed.

Please remember that this screen provides investment ideas only. Before buying any of the stocks here, do your own research.