In the early stages of economic recoveries, three stock-market sectors usually do well: energy, materials and industrials.

In this column, I recommend a few stocks in these key groups. Most analysts divide the market into 10 sectors, which means that there are seven sectors I'm disrespecting here. For example, I'm not recommending any technology stocks.

The tech group has already made a very lively move. And the biggest rise in technology stocks usually precedes the economic recovery.

Nor am I recommending consumer discretionary stocks even though that group is usually a good performer in the early phase of recoveries. My theory is that this time consumer stocks will be subdued, as consumers labor to unwind excessive debt.

The other five sectors don't seem timely. Health-care and consumer-staples stocks are steady but have less potential to rise if the recovery gains steam. Utilities and telecommunications stocks are mostly unexciting, in my view. As for financial stocks, I think they need time to recover from the financial crisis of the past two years.

I'm putting my money where my mouth is, holding a large number of energy, materials and industrial stocks for clients.

Why am I so sure we are even in a recovery? Well, I'm never sure of anything, but the evidence is very strong. My partner and I talk to executives of about 50 companies a month. From one after another, we are now hearing a consistent story that orders are increasing. Three months ago that wasn't so.

Some investors got discouraged in the past couple of weeks because of a weak report on new home sales in October and feeble quarterly earnings from Dell Inc. Those, I believe are counter- trend examples. There are improvements in auto sales, existing home sales, third-quarter gross domestic product, and many other gauges.

In energy, two stocks I like are Boots & Coots Inc. and National-Oilwell Varco Inc. Both are based in Houston.

Boots & Coots is a colourfully named stock with an even more colorful history. The company made its name fighting oil well fires and blowouts. It traces its roots back to the famous Red Adair, who not only put out oil well fires but also raced cars and was portrayed in a movie by John Wayne.

Today, putting out well fires and stopping blowouts is only part of the company's business. Much of its work now is in well maintenance and blowout prevention measures.

The emergency-response teams are still the company's door opener, chief financial officer Cary Baetz. After the emergency is over, Boots & Coots will send representatives to the well's owners, asking if they want preventive services to head off additional crises.

Boots & Coots shares sell for 10 times earnings and 1.0 times book value, bargain territory in my view. It should be considered speculative, because of its small size (the market value is only $110 million) and because it does business in potentially unstable countries such as Venezuela and Iraq.

National-Oilwell Varco is the world's largest maker of oilfield equipment. Its stock is up 77 percent this year.

After earning more than $1 a share for seven consecutive quarters, National-Oilwell dropped to 53 cents in the second quarter of this year, and rebounded to 92 cents in the third quarter. I think quarterly earnings per share may be back above $1 in 2010.

It's notable that National-Oilwell has stayed profitable while other companies are swimming in red ink. It has preserved its financial strength, and has debt equal to only six percent of equity. Last year it earned a handsome 20 percent return on equity.

In the materials group, one stock I like is Cliffs Natural Resources Inc., based in Cleveland. Cliffs is the largest producer of iron ore in North America. It also mines for iron ore and coal in South America and in Australia.

About half of Cliffs' sales are in the US. China is its second biggest market, and growing fast, at about a 49 percent clip the past two years. Japan is only its fifth biggest market, but sales there are growing even faster (88 percent a year the past two years).

If you believe, as I do, that Asia is likely to grow faster than the U.S. or Europe the next couple of years, this shift in Cliffs' sales pattern is a positive.

Cliffs stock is not as cheap as I wish at the moment. At about $43, shares are 43 times expected earnings for 2009.

In 2008, however, Cliffs earned $4.76 a share. The present price is only five times that figure.

As for industrials, there are quite a few I like at the moment. One that intrigues me, and which I only recently became aware of, is AZZ Inc., a Fort Worth, Texas, company that manufactures electrical equipment for utilities and services to the steel industry.

AZZ has reported a profit every year for more than a decade and logged its fifth consecutive year of rising profits this year, reporting a record $3.43 a share. In the current fiscal year, which ends in February, analysts look for $3.11. That projected decline is not bad in this economy.

The stock is selling for only 10 times earnings. That seems like an attractively slim multiple for a company that earned a 25 percent return on stockholders' equity last year.

Disclosure note: For clients and personally, I own shares in Boots & Coots and in Cliffs Natural Resources. I have no long or short positions in the other two stocks mentioned in this week's column.

John Dorfman, chairman of Thunderstorm Capital in Boston, is a columnist for Bloomberg News. The opinions expressed are his own. His firm or clients may own or trade securities discussed in this column.