The medical conglomerate Baxter International ( BAX) looked like a swooning biotech when its stock lost two-thirds of its value between March 2002 and March 2003.

Since then, Baxter has acted like booming biotech. Its stock has more than tripled in the past five years, easily outperforming the S&P 500 and the Amex Index of large drug stocks.

Also during this period, Baxter has driven its mixture of medications and devices well past the stock showings of health care hybrids like Johnson & Johnson ( JNJ) and Abbott ( ABT).

And at a time when defensive health care stocks aren't feeling well, Baxter gained about 10% for the 12 months ended June 11, comfortably ahead of Abbott and slightly ahead of J&J. The S&P 500 was down more than 10%, while the Amex drug index fell more than 23%.

"Baxter offers the high predictive value that investors in this increasingly volatile market environment desire," says a recent report by Ben Andrew of William Blair & Co., as he raised his rating to outperform from market perform. Baxter benefits from a "diversified, defensible product portfolio," says Andrew, who doesn't own shares.

First-quarter sales rose 8% and earnings per share gained 10% vs. the same period last year, heralding the 14th consecutive quarter in which Baxter beat Wall Street estimates, says a recent Bear Stearns report. Baxter raised its full-year earnings-per-share forecast, excluding special items, to a range of $3.18 to $3.24 from a previous estimate of $3.10 to $3.18.

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