This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Health Care Winners & Losers: Alkermes

Updated from 3:40 p.m. ET

A J.P. Morgan analyst said Tuesday that health care is currently the most attractive sector in the market, and stocks in health care could make an average gain of 25% in 2009.

Thomas J. Lee upgraded the health care sector to Overweight from Neutral, saying the stocks are generally inexpensive compared with their expected earnings, and profit growth could exceed Wall Street expectations. Lee said pharmacy benefits managers, biotechnology companies and pharmaceutical companies are the most attractive areas of the industry.

Health care stocks are getting stronger but are not yet at their peak value, as consumer staple companies are, Lee wrote. He said shares of health care service companies are closer to a peak.

"Given the continued weak (economic) outlook, coupled with low visibility, health care is likely to continue outperforming," he said. The analyst also believes that health care is less vulnerable to economic weakness than many other industries.

Lee said there could be significant buyout activity in the sector in keeping with shareholder demand, and big drug companies may look to combine or buy smaller companies to fight off the revenue they will lose as patents on key products expire.

In just such a move, Eli Lilly (LLY - Get Report) bought cancer drug maker ImClone Systems for more than $6 billion in November, and some analysts are expecting similar deals to follow.

Lee said biotechnology stocks may make the largest gains, along with health care equipment and life science tools and services. He expects little stock movement from facility operators and suppliers.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
ALKS $60.97 -2.48%
ARAY $9.30 -0.11%
CRL $79.29 -0.68%
EBS $28.76 -1.44%
ETRM $0.92 -2.56%


DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs