The market's choppy/consolidating tone, combined with the slow-growth/no-growth U.S. economy, suggests it is prudent to add a defensive stock or two to your portfolio, and with the aforementioned in mind, Medco Health Solutions is worth a review.

Medco Health Solutions (NYSE: MHS) is one of the largest U.S. pharmacy benefit managers, with services provided to client/member PBMs and physicians/pharmacies. (Note: Medco Health's shares split 2-for-1 on January 10, 2008.)

Analysts like Medco's high account retention, new business wins, economies of scale, and the company's entry into the Medicare Part B segment with its acquisition of PolyMedica.

Most portfolios could benefit from a pharmacy supply play for defensive purposes, and Medco Health Solutions (NYSE: MHS) is worthy of consideration for this role. Medco Health is one of the largest pharmacy benefits managers in United States, with services provided to member health plans offered by unions, HMOs, and corporations, among other organizations.

Analysts like Medco's high account retention, new business wins, economies of scale, and the company's entry into the Medicare Part B segment with its acquisition of PolyMedica. The Reuters F2007/F2008 EPS consensus estimates for MHS are $3.60/$4.38.

The risks? Analysts have their eye on the increased market penetration of generic drugs and some pricing pressure in contract renewals. Also, the stock's PE ratio of 30 is high, even considering MHS's growth prospects, hence the stock is vulnerable to a pull-back. The problem with the 'buy on pull-back' tactic here is that MHS's pull-backs have been mild, so there's no guarantee of a 5% pull-back before a share purchase decision.

MOST NOTEWORTHY: Gander Mountain, Lev Pharmaceuticals, Intermune, Aetna and Medco Health were today's noteworthy initiations:

• Nollenberger initiated shares of Gander Mountain Company (NASDAQ: GMTN) with a Sell rating and $5.00 target, and believes the company's goal of reaching profitability in 2007 could prove overly optimistic.
  
• Lev Pharmaceuticals (OTC: LEVP) was initiated with a Sector Outperformer rating and $3 target at CIBC, as the firm believes Cinryze will likely be approved in 1Q08 and they expect the company to have significant pricing leverage.
  
• JP Morgan resumed coverage of Intermune Inc (NASDAQ: ITMN) with an Overweight rating and expects shares to be driven by the company's pipeline in IPF and HCV.
  
• Aetna Incorporated (NYSE: AET) was initiated with an Outperform rating at Wachovia. The firm feels Aetna is positioned for better growth and higher quality earnings than its peers.
  
• William Blair started shares of Medco Health Solutions Inc (NYSE: MHS) with an Outperform rating, as they believe an aging population, rising health care costs, and an acceleration in new product introductions should increase demand for PBM services over the next five years.

OTHER INITIATIONS:

• ABN Amro started shares of Siliconware Precision Industries Company Ltd (NASDAQ: SPIL) and Advanced Semiconductor Engineering Inc (NYSE: ASX) with Buy ratings.
  
• Goldman initiated Silicon Image Inc (NASDAQ: SIMG) with a Sell rating and $4.50 target, and initiated Sigma Designs Inc (NASDAQ: SIGM) and SiRF Technology Holdings Inc (NASDAQ: SIRF) with Neutral ratings and a $43 target and $19 target, respectively.