"Once in critical condition, Schering-Plough has staged a remarkable turnaround," says Dan Sullivan, who recently selected the drug maker as his Spotlight Stock of the month.

The editor of The Chartist -- a top performing newsletter that uses a relative strength model in determining its portfolio holdings -- explains, "Earlier in the decade Schering-Plough drug maker was plagued with a series of problems and it appeared that the recovery process would be long and difficult."

Under its previous CEO, Richard Kogan, he notes, it faced record government fines for quality control problems in its manufacturing plants, an SEC investigation, alleged Medicaid fraud, and the loss of its patent for its allergy drug Claritin, which accounted for about 34% of worldwide sales in 2001.

The shares, he observes, traded at a high of 60 in 2001 and fell into the mid-teens in 2003. He states, "To rescue it from life-support, Schering-Plough hired Fred Hassan to replace Kogan as CEO."

The advisor suggests that most analysts doubted that Hassan could overcome the problems facing Schering-Plough (NYSE: SGP). The consensus, he notes, was that the company would be broken up or sold off to one of its rivals. So far, says Sullivan, the critics have been proven wrong.

During Hassan's tenure, Sullivan explains, revenue grew from $8.9 billion to $14 billion and earnings per share tripled. Almost immediately, suggests Sullivan, "Hassan went to work fixing the problems at Schering-Plough,"firing top management, cutting salaries, and addressing legal and regulatory issues. Now, he says, "It not only looks like Schering-Plough is on the road to a full recovery, but it looks like it will come sooner than expected."

The advisor points to the recently completed first quarter, in which net income rose 52% to 36 cents a share. Analysts, he says, were expecting earnings of only 29 cents. Meanwhile, revenue rose 17% to $2.98 billion.

Sullivan suggests, "Other signs that Hassan's turnaround strategy is working: ten consecutive quarters of double-digit revenue growth and a share price that has almost doubled over the past twelve months."

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