BOSTON ( TheStreet) -- Health care is the stock market's cheapest sector, based on earnings projections. The average S&P 500 health-care stock sells for a forward price-to-earnings ratio of less than 12. Here's a look at seven undervalued health-care stocks selling at even bigger discounts. A rotation from risk into quality will benefit these investments in 2011 and beyond. Researcher JPMorgan recommends overweighting each of these equities.

Below, the stocks are ordered by forward P/E.

7. Amgen ( AMGN) is a seasoned biotechnology company, with a market value of $51 billion.

Since 2008, it has grown net income and earnings per share 13% and 20%, annually, on average. Amgen's adjusted fourth-quarter earnings inched up 1% to $1.17, beating analysts' consensus estimate by 5.9%. Its sales rose 1%, as well, past $3.8 billion, matching the consensus forecast. Amgen is exceptionally cheap, trading at a trailing P/E of 11, a forward P/E of 9.7 and a book value multiple of 2.1, 40%, 54% and 67% discounts to biotechnology industry averages.

JPMorgan, ranking the stock "overweight", was impressed by management's 2011 guidance and expects it to be in a beat-and-raise environment in 2011 as there are notably low expectations for the company's legacy products and solid growth prospects for the company's denosumab antibody franchise. Amgen recently announced plans to purchase OncoVex, which has a drug for head and neck melanoma in stage three of FDA approval. JPMorgan's $65 target suggests 19% upside. Currently, 70% of analysts rate Amgen "buy."

Bullish Scenario: Piper Jaffray rates Amgen "overweight", expecting an advance to $73.

Bearish Scenario: Goldman Sachs ranks Amgen "sell", forecasting a fall of 8% to $50.

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