"The health care picks in our growth portfolio should prosper whatever the outcome of the raging health care debate," suggests growth stock specialist Stephen Leeb.

In The Complete Investor, he explains, "That's because they're leveraged to demographic realities, and in particular to the tide of aging baby boomers," Here, he reviews on portfolio holding -- Teva Pharmaceuticals (NASDAQ: TEVA).

Leeb says, "Israel-based Teva Pharmaceutical is the world's largest manufacturer of generic drugs. Capitalized at $49 billion, Teva pulled in some $11 billion in revenues in 2008, with generic drugs contributing more than two-thirds of those sales.

The Cabot Benjamin Graham Value Letter focuses on stocks that meet the strict value criteria of the legendary investor. Here, J. Royden Ward looks to Teva Pharmaceutical (NASDAQ: TEVA), noting, "Teva is based in Israel and develops, makes and sells generic and proprietary-branded (store brand) drugs."

The advisor explains, "The company is one of the largest generic drug-producing companies in the world and, in addition, sells active ingredients to other pharmaceutical companies.

"Teva's aggressive acquisition and product development programs are driving strong sales growth. The company recently purchased U.S.-based Barr Pharmaceuticals for $7.5 billion. Barr will increase Teva's generic drug sales significantly in the U.S. and parts of Europe.

"Stocks are likely in a new downtrend," says Michael Ashbaugh. In Marketwatch's The Technical Indicator, he looks at the S&P's prospects and some drug stocks set to buck the trend.

"The S&P 500 has violated its major moving averages in the closely tracked 900 area. The recent downturn was convincingly bearish, placing the burden on market bulls to reassert the uptrend.

"After finding resistance in the 923 area, the S&P sold off sharply, edging back under its 200-day moving average, which currently holds at 900 and now marks resistance. This is bearish price action.

"Generic drug mak Teva Pharmaceutical, Ltd. (NASDAQ: TEVA) delivered respectable earnings results," says Jack Adamo, who added the stock his Insiders Plus model portfolio.

"The company's earnings were up 4% on a proforma non-GAAP basis. In this case, that's the correct measurement. Net GAAP earnings were up tremendously, but aren't really representative of normal business factors.

"Although Teva gets much of its earnings from its proprietary multiple sclerosis drug, Copaxone, its primary business is generic drugs. That segment is inherently lumpy because profitability is greatly affected by which generic drugs it brings to market before any other generic company.

Teva Pharmaceuticals (NASDAQ: TEVA - option chain) shares have moved higher today after the Food & Drug Administration approved the company's generic version Pulmicort, an asthma drug made by competitor AstraZeneca (NYSE: AZN). If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on TEVA.

TEVA opened this morning at $43.00. So far today the stock has hit a low of $42.55 and a high of $43.78. As of 12:25, TEVA is trading at $42.84, up $0.65 (1.5%). The chart for TEVA looks bullish and S&P gives TEVA a positive 5 STARS (out of 5) strong buy ranking.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $35 range.

Analyst upgrades:

• Keefe Bruyette upgraded shares of AllianceBernstein (NYSE: AB) to Outperform from Market Perform as they find AB's risk/reward attractive given its attractive long-term business model. Wachovia upgraded Watson Pharma (NYSE: WPI) and Teva Pharma (NASDAQ: TEVA) to Outperform from Market Perform citing valuations and positive drivers for generics that include patent expirations and market share expansion.
• UBS raised Lloyds TSB Group (NYSE: LYG) to Neutral from Sell on expected pricing power following the HBOS (OTC: HBOOY) acquisition.
• Otter Tail (NASDAQ: OTTR) was upgraded to Outperform from Neutral at Baird.
• GFI Group (NASDAQ: GFIG) was upgraded at Citigroup to Hold from Sell.
• Merrill upgraded Logitech (NASDAQ: LOGI) to Neutral from Underperform.

Analyst downgrades:

• JP Morgan downgraded shares of Lloyds TSB Group to Underweight from Neutral on capital concerns and believes the HBOS acquisition is not in the best interest of shareholders.
• Stephens downgraded Universal Truckload (NASDAQ: UACL) to Equal Weight from Overweight on valuation and concerns about a slowdown in the flatbed sector. The firm's target remains $28.

MAJOR PAPERS:

• The Wall Street Journal reported that it is the Bush Administration versus Democrats versus Republicans to decide the strategy to stabilize Federal National Mortgage Association (NYSE: FNM) -- Fannie Mae -- and Federal Home Loan Mortgage Corporation (NYSE: FRE) -- Freddie Mac. The Administration's plan would let the Treasury Department advance a credit line and the opportunity for the government to buy equity in either firm. A package is expected to pass but not before the political and economic ramifications are battled out. Democrats and Treasury want it to be a part of a housing rescue plan; Republications oppose it.
• The Clinton Foundation, headed by former President Clinton, believes it has a pricing agreement in place that it expects will make malaria drugs affordable and available to millions of poor people worldwide, the Wall Street Journal reported.
• The Financial Times reported that UBS AG (NYSE: UBS) and Liechtenstein's LGT Group will today be accused by U.S. Congressional investigators of using the "cloak of bank secrecy laws" to help American clients evade billions of dollars in taxes.

OTHER PAPERS:

• Globes reported that Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) is talks to acquire Barr Pharmaceuticals Inc (NYSE: BRL). The price tag is said to be between $7B and $7.5B.

"Analysts estimate the worldwide market for generics will increase from $75 billion to $125 billion by 2012," says Michael Shulman.

In his ChangeWave Biotech Investor he states, "The key question for us is: Who is going to make the most money from these expirations? And the 800-pound gorilla in this market is our long-time holding, Teva Pharmaceuticals (NASDAQ: TEVA).

"Teva is the largest and best generics company in the world with $9.4 billion in sales in 2007 and the gap between it and its competitors is growing. Teva has 331 products on the market, 65% more than its closest competitor.

"More importantly, based on its business model of a mix of proprietary and generic drugs, the company's operating margins are 10 points higher than competitors and that gap is widening. In fact, in the United States, the number of prescriptions filled with Teva generics is 50% more than its closest competitor.

"Be clear on this point: When it comes to generics, size does matter. The more a company sells, the more profit and cash it has available to do research and acquire more generics to add to its product list -- and the beat goes on.

Teva Pharmaceuticals (NASDAQ: TEVA) shares are falling after competitor Mylan Inc. (NYSE: MYL) was granted licensing rights to distribute a generic version TEVA's multiple sclerosis drug Copaxone in almost all major markets. This could lead to lower demand for the higher-priced Copaxone down the road. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TEVA.

After hitting a one-year low of $38.66 last June, the stock hit a one-year high of $50.00 in February. This morning, TEVA opened at $43.58. So far today the stock has hit a low of $43.31 and a high of $44.12. As of 12:25, TEVA is trading at $43.59, down $1.17 (-2.6%). The chart for TEVA looks bearish but improving slightly, while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating.

For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in three and a half months as long as TEVA is below $50 at September expiration. Teva would have to rise by more than 14% before we would start to lose money. Learn more about this type of trade here.

Teva Pharmaceuticals (NASDAQ: TEVA) raised its guidance for '07 after Teva launched a generic version of Wyeth (NYSE: WYE) Protonix over the weekend, to the apparent surprise of Wyeth management. It's clear that Teva must have started shipping the drug, and that's why it is raising guidance. Goldman Sachs analyst Randall Stanicky reaffirmed a "Buy" rating on Teva, saying the launch was unsurprising and the company has likely already shipped a decent amount of the generic drug to pharmacies.

This is just the latest in a long line of setbacks for big pharma, as generics continue to scoop up market share of drugs that come off patent. Teva, as the world's leading generic company, continues to grow and has a great pipeline for '08, and as a result the stock should continue climbing as well.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has a position in TEVA and is long the stock. Writer has no position in any other stock mentioned as of 12/24/07.

Start screaming crazier and crazier edicts and pronouncements if you want to be a tyrant these days. If you have any doubts about this, read a few of the gems that have escaped from the lips of North Korean President Kim Jong Il, Iranian President Mahmoud Ahmadinejad or Venezuelan President Hugo Chavez. I emphasize their first names because they make everything so personal and we see and hear them so often that I feel like they must want to be friends in some perverse way.

Hugo has called President Bush the devil during a worthless diatribe to the United Nations, and Kim has threatened the United States, Japan, South Korea, and anyone else that questions his tyrannical, ego-maniacal nuclear ambitions. However, you will note he has not threatened China. This I point out as evidence that he may appear crazy, but he is not stupid!

Mahmoud, on the other hand, has threatened only a third of the world including, with no lack of emphasis, Israel. He has stated Iran has no compunctions about losing 250,000 of its own people in the process of a first strike. However, the fact that Israel has second strike capability and the figure could reach 25 million people has not made it into any of his speeches. The latter figure no doubt might test the limits of his list of willing martyrs.

While there is an outside chance that this is all bluster, I can assure you (having started this story while traveling in Jerusalem) that the Israelis are taking these comments very seriously and are not likely to sit around doing nothing forever. While the idea of Israel striking first would not be unprecedented, it would also raise the stakes in what would be the scariest of bad-boy games.

If Mahmoud backs the Israelis into a corner... well that might be the all time dumbest stunt ever and could be the opening scene for Jackass 3. My perception is that Mahmoud will continue to threaten with the intent of keeping his enemies and rivals off balance and unfortunately might guess wrong about the edge of sanity (never mind wisdom, we long ago passed that mark), where he appears to teeter back and forth.

Patience, patience, this story is about economics...