"Among our latest buy recommendations -- based on the value investing strategy of Ben Graham -- we like Gilead Sciences (GILD) and Teva Pharmaceutical (TEVA)," says J. Royden Ward.

The editor of Cabot Benjamin Graham Value Letter explains, "Gilead is a biopharmaceutical company that discovers, develops and markets therapeutic treatments to combat viral, bacterial and fungal infections. Its shares undervalued at 9.7 times forward 12-month EPS.

"Teva, based in Israel, develops, makes and sells generic and proprietary-branded (store brand) drugs. Its shares are clearly undervalued at 10.6 times forward EPS. We consider both stocks to be very low risk.

"Gilead Sciences (NASDAQ: GILD) develops treatments for life-threatening diseases and specializes in drugs for HIV, the virus that causes AIDS," notes Hannah Choe.

The contributing editor to Personal Finance explains, "Already the market leader in HIV antivirals, Gilead is in the beginning stages of developing Quad, the first-ever, four-in-one AIDS pill.

"The manufacture of HIV drugs, which accounts for more than three-quarters of revenue, is Gilead's highest-grossing business. This segment has held up through the recession; in the second quarter product sales for the antiviral franchise grew 26% from a year ago to $1.41 billion.

Last week, Goldman Sachs Group Inc. (NYSE: GS) and JPMorgan Chase & Co. (NYSE: JPM) reported stellar quarterly results. Lots more third quarter reports from the big banks are due this week.

However, analysts surveyed by Thomson Reuters anticipate year-over-year earnings declines from Bank of New York Mellon (NYSE: BK), BB&T Corp. (NYSE: BBT), M&T Bank Corp. (NYSE: MTB), Northern Trust Corp. (NASDAQ: NTRS), PNC Financial Services Group Inc. (NYSE: PNC), State Street Corp. (NYSE: STT), US Bancorp (NYSE: USB), and Wells Fargo & Co. (NYSE: WFC).

"Being contrarians, we are always looking for laggard stocks with the potential to rebound," says turnaround expert George Putnam.

In his The Turnaround Letter, the advisor reviews four medical and pharmaceutical stocks that have been among the worst performers in the S&P 100 since the market bottom. Despite their poor performance, he thinks they may be due for a rebound.

"We think that investors who got left behind by the first leg of the market rally are struggling to catch up.

"Gilead Sciences (NASDAQ: GILD), one of the world's largest biotechs, is a stock for all seasons," say growth expert Alexander Green.

The investment director for The Oxford Club explains, "It's a fine company with a solid balance sheet, a recession-proof business and excellent growth prospects."

"Gilead focuses on three main areas, including cardiovascular conditions and respiratory diseases. (Many may have taken its anti-influenza drug Tamiflu, Letairis to treat hypertension, or Macugen to treat macular degeneration.)

The earnings crunch begins in earnest this week, and analysts surveyed by Thomson Reuters are expecting a parade of companies reporting profit declines in the just completed quarter. That includes more financials, such as American Express Co. (NYSE: AXP), Bank of New York Mellon Corp. (NYSE: BK), M&T Bank Corp. (NYSE: MTB), Northern Trust Corp. (NASDAQ: NTRS), State Street Corp. (NYSE: STT), US Bancorp (NYSE: USB), and Wells Fargo & Co. (NYSE: WFC). On the other hand, Capital One Financial Corp. (NYSE: COF), E*Trade Financial Corp. (NASDAQ: ETFC), Regions Financial Corp. (NYSE: RF), and Zions Bancorp. (NASDAQ: ZION) are expected to post losses.

This week's anticipated earnings decliners also include tech companies such as Apple Inc. (NASDAQ: AAPL), Lexmark International Inc. (NYSE: LXK), Microsoft Corp. (NASDAQ: MSFT), Qualcomm Inc. (NASDAQ: QCOM), Texas Instruments Inc. (NYSE: TXN), and Yahoo! Inc. (NASDAQ: YHOO). Advanced Micro Devices Inc. (NYSE: AMD) is expected to post a loss.

Few would argue with the claim that Gilead Sciences (NASDAQ: GILD) is the best-managed biopharma company on the planet.

It dominates the HIV treatment market and gets a 19%-plus royalty on Tamiflu, which is used to treat H1N1 (swine) flue. Gilead also has several drugs on or headed for the market to treat pulmonary disease and hard-to-treat high blood pressure.

Your best strategy for life-changing profits?

Buy the stock and sell the calls (then use the cash to buy puts on the market, which is headed down further.) Or buy long-term calls and keep an eye on them.

Next: Biotech Stock #2

Last year, as the market sank, one group actually went up -- large-cap, cashflow positive biotech and genomics companies.

Here are six biotech stocks with the potential to deliver life-changing profits:

Biotech Stock #1: Gilead Sciences (NASDAQ: GILD)
Biotech Stock #2: Questcor Pharmaceuticals (NASDAQ: QCOR)

Analyst upgrades:

• UBS upgraded Target (NYSE: TGT) to Buy from Neutral and raised its price target to $52 from $45 citing reduced inventories, some credit stability, and an improved back-to-school period.
• Credit Suisse said concerns regarding Safeway's (NYSE: SWY) price position are overblown and that earnings risk is limited. The firm upgraded shares to Outperform from Neutral and raised the target price to $25 from $22.
• Oppenheimer upgraded Canadian Solar (NASDAQ: CSIQ) to Outperform from Perform as it believes the story is underappreciated following the recent sector rally. The firm has a $14 price target on the stock.
• CME Group (NASDAQ: CME) was upgraded to buy from Neutral at Goldman.
• Freeport McMoRan (NYSE: FCX) was upgraded to Overweight from Neutral at JP Morgan.
• Gilead Sciences (NASDAQ: GILD) was upgraded to Buy from Neutral at FTN Equity.

Analyst upgrades:

• Citigroup upgraded Lennar (NYSE: LEN) to Buy from Hold as it believes the company's near-term liquidity profile is improved following the $400M debt issuance. The firm raised its target price to $12 from $11.
• Jefferies upgraded Rowan Companies (NYSE: RDC) to Buy from Hold as it believes jack-up drillers will continue to outperform deepwater names. The firm raised its target price to $27 from $20.
• Keefe Bruyette upgraded First Financial (NASDAQ: FFIN) to Market Perform from Underperform to reflect more positive loan data for the Texas banks. The firm raised its target price on shares to $44 from $38.
• MGM Mirage (NYSE: MGM) was upgraded to Overweight from Neutral at JP Morgan.
• Morgan Stanley (NYSE: MS) was upgraded to Outperform from Market Perform at JMP Securities.
• Brinker (NYSE: EAT) was upgraded to Overweight from Equal Weight at Barclays.

Analyst upgrades:

• Merriman upgraded Dendreon (NASDAQ: DNDN) to Buy from Neutral on expectations shares will react positively to the full IMPACT data release on April 28. The firm thinks Provenge could represent the first cancer immunotherapy approved in the U.S. and raised its valuation range on the stock to $33-$34 from $18-$19.
• Piper Jaffray upgraded Andersons (NASDAQ: ANDE) as it believes the valuation is attractive, investor expectations are low, and the company's fertilizer and rail segments could recovery in FY10. The firm has a $19 target on shares. Goldman upgraded the auto sector to Neutral from Cautious and added Ford (NYSE: F) to its Conviction Buy list. The analyst does not believe Ford will have to declare bankruptcy and sees the company benefiting from Chrysler share declines and GM's (NYSE: GM) reduced product offerings. Ford's price target is $6
• Banc of America/Merrill upgraded U.S. Airways (NYSE: LCC) to Buy from Underperform.
• Broadcom (NASDAQ: BRCM) was upgraded to Equal Weight from Underweight at Morgan Stanley.
• Caterpillar (NYSE: CAT) was raised to Overweight from Neutral at JP Morgan.

The earnings crunch is on. Among the many companies scheduled to report quarterly results this week are such so-called bellwether stocks as Amazon.com Inc. (NASDAQ: AMZN), Caterpillar Inc. (NYSE: CAT), Coca-Cola Co. (NYSE: KO), DuPont (NYSE: DD), and United Parcel Service Inc. (NYSE: UPS), all of which analysts surveyed by Thomson Reuters expect to report lower earnings for the recent quarter. Altria Group Inc. (NYSE: MO), McDonald's Corp. (NYSE: MCD), and Raytheon Co. (NYSE: RTN), on the other hand, are expected to post marginal earnings growth.